The Issue Whether the adult open heart surgery rule in effect at the time the applications were filed until January 24, 2002, or the rule as amended on that date applies to this case. Whether either or both, Lifemark Hospital of Florida, Inc., d/b/a Palmetto General Hospital ("Palmetto General") and Miami Beach Healthcare Group, Ltd., d/b/a Aventura Hospital and Medical Center ("Aventura Hospital") demonstrated the existence of not normal circumstances for the issuance of certificates of need ("CONs") to establish adult open heart surgery programs in Dade County.
Findings Of Fact The Agency for Health Care Administration ("AHCA") administers the certificate of need ("CON") program for health care facilities and services in Florida. Section 408.034, Florida Statutes. Aventura Hospital Miami Beach Healthcare Group, Ltd., d/b/a Aventura Hospital and Medical Center ("Aventura Hospital") is the applicant for CON No. 9395 to establish an adult open heart surgery program in Dade County, in AHCA District 11. Aventura Hospital is a 407-bed community hospital located in the recently incorporated City of Aventura in northeast Dade County. It is approximately one mile west of the Atlantic Ocean on U.S. Highway 1, three-tenths of a mile south of the Broward/Dade County line. It is halfway between Fort Lauderdale and downtown Miami. Aventura Hospital is owned by the Hospital Corporation of America ("HCA"), which operates hospitals in 30 states and 3 countries, including 40 hospitals in Florida. The 407 beds at Aventura Hospital include 327 acute care beds, 32 adult psychiatric beds, 24 adult substance abuse beds, and 24 obstetrics beds. Services, in addition to those provided in the specialty beds, include general medical/surgical services, oncology, a breast diagnostic center, children's after-hours walk in clinic, comprehensive cancer center, dialysis, intensive care, orthopedics, inpatient and outpatient surgery, and physical, speech and occupational therapies. It is a Baker Act facility. The Aventura Hospital staff has from 700 to 750 medical doctors, and 1,200 to 1,300 employees. The emergency room ("ER") has approximately 34,000 annual visits. According to one ER physician on the staff, the average age of patients presenting at the Aventura Hospital ER is 84 years old. That results in a higher than average hospital admission rate from the ER, 35 to 40 percent, as compared to 15 percent nationally. The staff includes 52 clinical cardiologists, 27 invasive cardiologists and five cardiovascular thoracic surgeons. They currently perform, at Aventura Hospital, inpatient and outpatient cardiac catheterizations ("caths"), pacemaker implants, echocardiograms, cardiac stress and cardiac nuclear testing, diagnostic and transesophageal echocardiograms, diagnostic and interventional vascular surgeries. For the 12 months ending June 30, 2001, 422 open heart patients left the Aventura Hospital's primary service area for their surgeries, and 1,132 received cardiac cath procedures. At Aventura Hospital, from April 1999 through March 2000, 178 diagnostic cardiac caths were performed. In terms of total cardiology services, Aventura Hospital is the largest non-open heart provider in the District, ranking second to Mount Sinai Medical Center ("Mount Sinai"). In calendar year 2001, there were 3,489 cardiovascular disease discharges from Aventura Hospital. The boundaries of the primary service area, from which Aventura Hospital draws most of its patients, are Hollywood Boulevard to the north, U.S. Highway 441 to the west, the Bal Harbour/Miami Shores communities near 125 Street to the south and the Atlantic Ocean to the east. Parkway Regional Medical Center ("Parkway Regional") in Dade County, and Memorial Regional Medical Center ("Memorial Regional") in Hollywood, in Broward County, are the closest hospitals to Aventura Hospital. The primary service area has a population of approximately 250,000 residents and includes growing retirement communities such as Sunny Isles Beach, Hallandale Beach, Southeast Hollywood, North Miami Beach, part of Miami Shores, and Bal Harbour. Parkway Regional and Aventura reported a combined total of 1,721 ischemic heart diseases (IHD) discharges in calendar year 2000. IHD is the diagnostic category for patients experiencing a narrowing of the arteries who are most likely ultimately to require open heart surgery. An international patient services department at Aventura Hospital assists patients, particularly from Canada, and Central and South America. Aventura Hospital is a member of the Miami Medical Alliance, also known as Salud Miami, which has promoted Miami as a destination for health care. Miami Heart Institute (Miami Heart), Mount Sinai, Baptist Hospital (Baptist), South Miami Hospital (South Miami), Miami Children's Hospital and Jackson Memorial Hospital (Jackson Memorial) are among the members of the Alliance. At the time the CON application was filed, Aventura Hospital was scheduled for expansion with the addition of a three-story tower and other capital projects costing an estimated $50 million. Subsequently, in December 2001, Aventura Hospital received approval from HCA for the expenditure of an additional $80 million to build the tower up to nine stories immediately, with the structure capable of ultimately being increased to 12 stories. It is expected to be able to withstand a direct hit from a Class V hurricane. In the past, Aventura Hospital has been entirely evacuated twice due to hurricane warnings. When construction is complete, the ER will be approximately three times larger, relocated to the first floor of the new tower, and projected to receive 50,000 visits annually. Ten new operating rooms on the second floor will include two that are properly-sized for cardiovascular surgeries. Because of higher ceilings in the new tower, the second floor of the new building will connect to the third floor of the existing building, on which the cardiac cath lab and related diagnostic equipment is located. If the open heart program is approved, a ten-bed cardiovascular intensive care unit ("CVICU") will be added to the second floor of the new building, and a second cardiac cath lab will be constructed. A dedicated elevator will connect the surgery suites to a 42-bed intensive care unit ("ICU") on the third floor. The remaining floors will consist of single patient rooms equipped or capable of being equipped for telemetry monitoring. The projected building cost for the portion of the construction related to the open heart surgery program is $3 million. Mount Sinai which purchased Miami Heart from HCA, has agreed to close one of its two open heart surgery programs within one year following the issuance of an adult open heart surgery CON to Aventura Hospital. Otherwise, Mount Sinai is committed to operate both programs for five years from June 30, 2000. Jeffrey Gregg, the head of the CON program at AHCA testified that he believes that it is "unprecedented" for an applicant to submit a letter from an existing provider committing to close a program. (Tr. 3061). Aventura Hospital has also offered to commit to providing 2.5 percent of the patient days generated by the adult open heart surgery program to Medicaid and charity patients. Palmetto General Lifemark Hospitals of Florida, Inc., d/b/a Palmetto General Hospital ("Palmetto General") is an applicant for CON No. 9394 to establish an adult open heart surgery program, also in Dade County, AHCA District 11. Palmetto General is a 360-bed acute care hospital located in the City of Hialeah in northwest Dade County at the intersection of 122nd Street, Northwest, and the Palmetto Expressway. Palmetto General is an affiliate of the Tenet Health Care Corporation ("Tenet"), which operates 16 hospitals in Florida, five in Dade County. They are, in addition to Palmetto General, Hialeah Hospital, North Shore Medical Center, Parkway Regional in northern communities, and Coral Gables Hospital in the south. Tenet owns Florida Medical Center, which has an adult open heart surgery program in Broward County. Tenet also operates the open heart program at the Cleveland Clinic in Broward County. The 360 beds at Palmetto General are divided into 253 acute care beds (excluding obstetrics and pediatrics), 48 adult psychiatric beds, and 10 neonatal intensive care beds. Services available on the Palmetto General campus include outpatient imaging and surgery, psychiatry, oncology, rehabilitative therapies, and intensive care. Palmetto General has a staff of 600 physicians, 350 of whom are on the active staff, and 1,500 employees. Palmetto General has approximately 40 cardiologists on staff, 19 of whom are invasive cardiologists. The services available include ultrasound, exercise testing, arrhythmia studies, including halter monitoring and electrophysiology, surgical insertions of pacemakers and defibrillators, and diagnostic cardiac caths. For the 12 months ending June 30, 2001, 1,658 cardiac caths and 668 open heart procedures were performed on patients from the Palmetto General primary service area. At Palmetto General, there were 528 diagnostic cardiac caths performed from April 1999 through March 2000, making it the largest cardiac cath provider in Dade County, which does not also have an open heart program. In calendar year 2001, there were 3,089 cardiovascular disease discharges from Palmetto General. The primary service area for Palmetto General includes the communities of Hialeah, Hialeah Springs, Miami Lakes, and portions of Opa Locka. Approximately 450,000, or 22 percent of the 2.2 million people living in District 11, live in the Hialeah area, over 50,000 are over 65 years old. The 65 and older population in the Palmetto General primary service area is projected to increase by 10 percent by 2005. Seventy to 80 percent of the residents of Palmetto General's primary service area are Hispanic, many first-generation. Most of the staff and employees of Palmetto General are Hispanic or speak Spanish. In addition to Palmetto General, the primary service area includes two other hospitals, Hialeah Hospital and Palm Springs General Hospital ("Palm Springs General"). Of the three, only Palmetto General has a cardiac cath lab. About 400 suspected heart attack patients are treated in the ER at Palmetto General each year. The ER has approximately 60,000 annual visits. It is the third busiest ER in the county. Although the use rate for open heart surgery has been flat or declining throughout the district, it has increased in the Palmetto General service area. While District 11 had an absolute increase of 51 open heart cases from 1999 to 2000, there was a 91-case increase in the Palmetto General service area. Together Palmetto General, Hialeah Hospital, and Palm Springs reported 2,206 IHD discharges, 982 of those from Palmetto General. Subsequent to filing the open heart CON application, Palmetto General developed a $23 million master facility plan of capital expenditures to upgrade the facility in response to operational deficiencies and capacity constraints. Tenet approved the expenditure of $6 million in the first year. When entirely implemented, the plan will result in doubling the size of the ER, expanding maternity labor and delivery areas, building a new 18-bed intensive care unit with space to add ten more beds later, and refurnishing existing operating rooms and adding three more. Palmetto General also, in 2002, experienced significant discord among the medical staff which apparently has been resolved with a change in the hospital's senior management. Palmetto General maintains that its master facility plan is independent of its plans for an open heart surgery program, although the master plan supports and facilitates that proposal. Mount Sinai and Aventura Hospital contend that Palmetto General has impermissibly amended the architectural plans for the open heart surgery program. The plans, as submitted in the CON, showed the addition of two open heart operating rooms on the ground floor, with an area of shelled-in space, and mechanical/electrical space, and part of the roof, above that on the first floor, and an elevator and corridor on the second floor within the same area designated as being within the scope of work. A separate area of work, on the schematic drawing of the second floor, showed a four-bed CVICU. On the master facility plan, the two open heart surgery operating rooms are in the same location but reconfigured. The space above is still shown as shelled-in and it may have columns. On the second floor, the four-bed CVICU for open heart patients is no longer a separate unit but is included in an existing ten- bed CVICU. The CVICU is adjacent to the existing cardiac cath lab and to an area shown for cath lab expansion, previously a part of the roof on the CON drawing. As a result of the use of the existing space for the CVICU, the total area devoted to the open heart program is reduced in size. Although the two open heart operating rooms are reconfigured and the four-bed open heart CVICU will not be an entirely separate unit, the concept for the open heart surgery program is essentially unchanged. Construction detailed drawings of the master plan were expected to be completed in January 2003. If the open heart surgery program CON is approved, Palmetto General will commit to providing 7.5 percent of open heart and angioplasty services to Medicaid and charity care patients. Existing District 11 Providers Baptist, Cedars Medical Center ("Cedars"), Jackson Memorial, Mount Sinai, Miami Heart, Mercy Hospital ("Mercy"), South Miami, and Kendall Medical Center ("Kendall") are the eight hospitals in Dade County which have open heart surgery programs. Mount Sinai and Miami Heart are, as previously noted, both owned by Mount Sinai. They are located within two miles of each other on Miami Beach, near the Julia Tuttle Causeway. Jackson Memorial which, like Mount Sinai, is a University of Miami Medical School teaching hospital is located in downtown Miami, across the street from Cedars and near Mercy. Kendall is further south and west. South Miami and Baptist are in South Central Dade County. In the summer and fall of 2000, when AHCA published the fixed need pool, and Aventura Hospital and Palmetto General filed their applications, four of the eight open heart programs in Dade County were operating at volumes below 350 cases a year. In 1999, those programs and volumes were Cedars, with 340 surgeries, Jackson Memorial with 332, South Miami at 211, and Kendall with 187. In 2001, Cedars increased to 361 open heart cases and Jackson Memorial reported 513. The programs at Kendall and South Miami have continued to operate below 350 cases a year. The volume at Kendall was 184 in 2000, and 295 in 2001. South Miami reported 175 and 148 in calendar years 2000 and 2001, respectively. Like Aventura Hospital, Cedars, and Kendall are owned by HCA. South Miami and Baptist Hospital, which are 3.5 miles apart, are both affiliated with the Baptist health care system. Because volumes were below 350 at existing programs, AHCA published a numeric need for zero additional programs in District 11 for the January 2003 planning horizon. The rule on numeric need, as revised on January 24, 2002, reduced the minimum volume for existing providers to 300 open heart surgeries for the 12-month period specified in the rule, although it implicitly increased the expected size of each existing program to 500 cases by increasing the divisor in the numeric need formula. Under either rule, the applicants must demonstrate the existence of not normal circumstances for the approval of any additional open heart surgery programs in the district. Under the old rule, with 350 as the divisor in the formula, the numeric calculation, before being reduced to zero because of low volume programs, resulted in a need for 2.1 additional programs. That number is a negative one under the new rule. Aventura Hospital projected that its open heart surgery volumes would be 240, 312, and 347 during the first three years of operations, anticipating these to be the years ending in September of 2004, 2005, and 2006, respectively. Palmetto General projected volumes of 148, 210, and 250 open heart surgeries and 225, 230, and 310 angioplasties, in the first three years. From 1996 to 2001, the total annual volume of open heart surgeries in District 11 declined by 346, from 3,821 in 1996, to 3,421 in 2000, then increased slightly to 3,475 in 2001. Therefore, if Aventura Hospital and Palmetto General achieve projected volumes, it will result largely from redirecting cases from existing providers including one that would close if Aventura's CON is approved. The declining open heart volumes also reflects a technological improvements and a shift to less invasive angioplasty procedures. The number of angioplasties performed in District 11 increased from 6,384 in 2000, to 7,682 in 2001. Mount Sinai and Miami Heart Mount Sinai is one of six statutory teaching hospitals in Florida, with 19 accredited training programs, including residencies and fellowships. The cardiovascular and thoracic surgery residency program is shared with Jackson Memorial. In addition to the University of Miami, Mount Sinai is affiliated with the medical schools at Nova Southeastern University, Barry University, and the University of South Florida. Mount Sinai has the largest open heart volume in District 11, with over 40 percent of the total volume. It also has the broadest geographical draw for patients, with only 60 percent of the cases originating from the District. In the year from April 1999 to March 2000, Mount Sinai reported performing 1,034 adult open heart surgeries and 4,318 adult inpatient cardiac caths. In calendar years 2000 and 2001, the volume of open heart surgeries at Mount Sinai remained virtually constant at 980 and 976, respectively. Angioplasties increased during that same period of time from 1,037 to 1,067. At Miami Heart, from April 1999 through March 2000, 483 open heart surgeries and 4,179 cardiac caths were performed. The combined total of therapeutic cardiac caths or angioplasties performed at Mount Sinai and Miami Heart is approximately 2,500 a year. There is evidence that Mount Sinai has begun to phase-out open heart cases at Miami Heart where the volume dropped to 390 surgeries in 2000, and to 296 in 2001. In a travel time study commissioned by Mount Sinai, the drive time from Palmetto General ER to Mount Sinai ER was 28 minutes to travel the 15.5 miles. From various zip codes within the Palmetto General service area to the Mount Sinai ER, travel times ranged from 14 minutes to 36 minutes. Driving times from Aventura to Mount Sinai ranged from 18 to 37 minutes. Due to its close proximity, to Mount Sinai, it reasonably should take approximately the same driving time to reach Miami Heart. In an Aventura Hospital survey of transfers of high- risk cardiac patients, the average times were estimated to range from 59 minutes from Aventura Hospital to Mount Sinai and 1 hour and 26 minutes from Aventura Hospital to Miami Heart Institute. Those times must include more than actual drive time, otherwise the differences between Mount Sinai and Miami Heart would not be so significant. One would also anticipate that, while under common ownership, transfers from Aventura Hospital to Miami Heart would have been less cumbersome. The accompanying narrative in the CON suggests that time frames may have been counted from the time the decision to transfer is made to the time the patient arrives at the receiving facility. The testimony regarding the data compilation process was vague and inadequate and, therefore, the conclusions are unreliable. The Mount Sinai study showed travel times of 27 minutes to Miami Heart and 28 minutes to Mount Sinai from Palmetto General. That difference of one minute is confirmed in data underlying Aventura Hospital time travel study. Based on projected volumes, prior transfers, referral patterns and market shares, an open heart program at Palmetto General will reduce the volumes at Mount Sinai and Miami Heart by 92 to 107 open heart surgeries a year, for a financial loss of $1.6 million. An open heart program at Aventura is expected to reduce the combined volume at Mount Sinai and Miami Heart by 196 cases. A combined reduction of approximately 300 cases and the closure of one of the programs would leave the remaining Mount Sinai program at approximately 900 open heart cases, with a loss of $4.7 million. Mount Sinai was projected to experience a net loss from operations of $32 million in 2002. There was testimony that overall financial management and the potential for profitable operations have improved. Despite the fact that an Aventura program will have almost double the adverse impact of one at Palmetto General, Mount Sinai, in the asset purchase agreement resulting in its acquisition of Miami Heart from HCA, agreed not to contest the application filed by Aventura Hospital. Jackson Memorial Jackson Memorial is the hospital designated to provide indigent care in Dade County, through a public health trust funded by a portion of sales taxes. In the 12 months ending March 2000, 334 open heart surgeries and 3,644 cardiac caths were performed at Jackson Memorial. In 2000 and 2001, the open heart volume increased to 438 and 513 surgeries, respectively. The Mount Sinai travel time study, showed that the distance from Palmetto General to Jackson Memorial was 10.7 miles and that the average drive took 22 minutes. Jackson Memorial will lose an estimated 46 cases to Palmetto General, in the third year of an open heart program in 2004, and 12 cases to an Aventura Hospital program, or a combined total of approximately 60 cases a year. Mercy Mercy had a volume of 412 open heart surgeries and 2,704 cardiac caths, from April 1999 through March 2000. In calendar year 2000 and 2001, the open heart volumes at Mercy were 492 and 478, respectively. The average driving time from Palmetto General to Mercy ranged from 24 minutes to 38 minutes, averaging 27 minutes in Mount Sinai's expert's study. If Palmetto General is approved, a reduction of 44 open heart cases is expected at Mercy. An Aventura Hospital program is expected to result in a five-case reduction at Mercy. Cedars The volume at Cedars was 316 open heart cases from April 1999 through March 2000. In calendar years 2000 and 2001, the volume increased to 334 and 361 open heart surgeries, and to 1,323 and 1,468 angioplasties, respectively. The average driving time to Cedars, from Palmetto General, was 23 minutes, in the Mount Sinai travel time study, with a range of drive times from 17 minutes (starting at 4:19 a.m.) to 30 minutes (starting at 7:06 a.m.). If Palmetto General is approved to become an open heart provider, Cedars' volume is expected to be reduced by 20 surgeries. If Aventura Hospital becomes an open heart provider, Cedars' volume will be reduced by an estimated 14 cases. Kendall Kendall had a volume of 180 open heart cases for the year ending March 2000. Kendall has consistently been a low volume open heart provider, increasing from 136 surgeries in 1989, to 295 in 2001. Kendall is located in southwestern Dade County, well beyond the primary service areas of Palmetto General and Aventura Hospital. The common feature shared with Palmetto General is that Kendall is also considered an Hispanic or Spanish-speaking hospital, although every hospital in Dade County is staffed to serve Spanish-speaking patients. Mount Sinai's study found the average drive time from Palmetto General to Kendall to be 23 minutes, covering 14.6 miles. Estimates of case reductions at Kendall are six if Palmetto General is approved and one if Aventura Hospital is approved. South Miami and Baptist South Miami reported a volume of 199 open heart cases for the year ending March 2000. The volume of open heart surgeries has been low, over the years, from 132 in 1989, to 148 in 2001, never exceeding 215 cases in any one year. South Miami has become a referral center for complex, multi-vessel angioplasties. Angioplasties increased, at South Miami, from 723 in 2000, to 837 in 2001. Like Kendall, South Miami and Baptist have no overlap with the primary service areas of Aventura Hospital and Palmetto General. If Palmetto General offers open heart services, then South Miami would lose approximately nine cases in the third year of operations. If Aventura Hospital's CON is approved, then South Miami would lose an estimated two cases that year. The volumes at Baptist, from April 1999 through March 2000, were 472 open heart surgeries and 4,730 cardiac caths. The Baptist volume of open heart cases declined to 428 in 2000, and 408 in 2001. Baptist's volume is expected to decline by 14 cases lost to Palmetto General, and two to Aventura Hospital. Existing District 10 Providers Mount Sinai, in its proposed recommended order, suggested that Memorial Regional, the Cleveland Clinic, and Florida Medical Center all in Broward County, are available open heart providers for northern Dade County residents. Tenet operates the open heart program at the Cleveland Clinic, which is 17 miles north of Palmetto General. The average travel time to the Cleveland Clinic, in the Mount Sinai study, was 26 minutes, but that is unreliable because it includes one run where the driver obviously had to speed, at 4:42 a.m., to average over 60 miles per hour. The staff at Cleveland Clinic is not predominantly Spanish-speaking. The medical staff is also closed so that only Cleveland Clinic doctors practice at that hospital. Patients have interruptions in their continuity of care when referred to an entirely different medical staff. In addition, the Cleveland Clinic is a referral hospital drawing patients from outside the area. It does not function as a community hospital. The Cleveland Clinic is not, therefore, an alternative provider for Dade County residents. At Memorial Regional, six miles north of Aventura Hospital, there were 766 open heart surgeries performed in one 12-month period in 1999 and 2000 and 641 in calendar year 2000. Twenty-six percent of the Aventura Hospital primary service area open heart surgeries were performed at Memorial Regional in 2001, as compared to 5 percent from the Palmetto General Area. Over 30 percent of the angioplasties performed on Aventura Hospital service area residents were performed at Memorial Regional in 2001, and less than 4 percent for Palmetto General service area residents. If Aventura Hospital is approved, the loss in volume from Memorial Regional would be approximately 103 cases a year. Aventura Hospital noted that Memorial Regional has experienced capacity problems. In Columbia Hospital Corporation of South Broward vs. AHCA, the administrative law judge found that the proposal to establish a new hospital in Miramar was intended to " . . . allow Memorial Regional and Memorial West the opportunity to decompress and operate at reasonable and efficient occupancies into the foreseeable future without the operational problems caused by the current over-utilization." There is evidence that the relief resulting from the construction of the Miramar Hospital, will not alter the difficulties that Aventura Hospital-based doctors experience in gaining access to the cardiac cath lab at Memorial Regional. Florida Medical Center has approximately 450 open heart surgery cases a year. It is a Tenet facility in Western Broward County. The financial data from Florida Medical Center was used in Palmetto General's projections of income and expenses, but there was no evidence that Florida Medical Center's open heart program is a viable alternative to programs at either Aventura Hospital or Palmetto General. Review Criteria Subsection 408.035(1) - need in relation to applicable district health plan; 59C-1.030(2)(a)-(e) - need that the population has, particularly low income, ethnic minorities, elderly, etc.; relocation of a service; needs of medically underserved, Medicare, Medicaid and indigent persons; and Subsection 408.035(11) - past and proposed Medicaid and indigent care. The District 11 health plan includes preferences for applicants seeking to provide tertiary services who have provided the highest Medicaid and charity care, and who have demonstrated the highest ongoing commitment to Medicaid and indigent patients. Aventura Hospital provided approximately 1 percent charity, 6 to 7 percent Medicaid and 17 percent Medicare in 2001. It qualified as a disproportionate share Medicare hospital. Aventura Hospital's proposed CON commitment is to provide a minimum of 2.5 percent of open heart surgery and angioplasty patient days to Medicaid and charity patients. Palmetto General is and, for at least the last ten years, has been a disproportionate share Medicaid and Medicare provider. Over 20 percent of the total care at Palmetto General has been given to Medicaid patients in recent fiscal years. The care to indigent patients was approximately $8 million in one year. In this regard, Palmetto serves as a "safety net" hospital for poor people, like Jackson Memorial and Mount Sinai. Palmetto General will meet the needs of ethnic minorities, and more Medicaid, low income and indigent patients. Aventura Hospital is serving an older population and, in effect, would be relocating an open heart program from Miami Heart. In a service like open heart surgery, Medicare is the dominant payor. Subsection 408.035(2) - availability, quality of care, accessibility, extent of utilization of existing facilities in the district; Rule 59C-1.033(4)(a) - two-hour travel time; and Subsection 408.035(7) - enhanced access for residents of the district. The applicants contend that the existing programs in the district are geographically maldistributed to the detriment of the residents of northeast and northwest Dade County. They also contend that those access issues outweigh the fact that district residents can reach open heart providers within the two- hour travel time standard in the open heart rule. In its proposed recommended order, Mount Sinai noted that if Dade County is divided in half using " . . . State Road 836 (also known as the Palmetto Expressway), which runs east-west in the center of the County, near Miami International Airport . . . ," there are four existing open heart providers in the north and four in the south. This statement must be inaccurate because Palmetto General's location was described as being on the Palmetto Expressway with no existing open heart providers in the same service area. The existing programs in District 11 are inappropriately dispersed geographically to serve the population, as it is distributed throughout Dade County. The Hialeah area, with 22 percent of the population, is larger than 14 counties in Florida which have at least one open heart surgery program. The population in the Aventura Hospital primary service area, 250,000 residents, is roughly half that of Hialeah, but is equal to or larger than five counties in Florida which have open heart surgery programs. If the applicants' patients are not transferred to other hospitals, then the volume of open heart procedures at those hospitals will decline. The medical literature and experts in the field demonstrate a relationship between volume and quality. In Florida, the old rule and new rule set the minimums for existing providers at 350 and 300, respectively. If Aventura Hospital's open heart CON is approved, almost 200 surgeries will be lost from Miami Heart and Mount Sinai, approximately half of that from the program that will be closed, and just over 100 from Memorial Regional. The effect on the low volume providers will be negligible, one lost case to Kendall and two from South Miami. Based on its projections, Aventura Hospital expects to reach 347 open heart surgeries in its third year of operation. Even assuming that most of the cases would be redirected from other providers, the projection is aggressively based on the assumption that Aventura Hospital will have a market share of 87 percent of its primary service area. If Palmetto General's open heart CON is approved, the greatest impact will also be on Mount Sinai and Miami Heart, a loss of approximately 100 surgeries a year, and on Jackson Memorial, a loss of 46 surgeries a year. Palmetto General projected that it would reach a volume of 250 open heart surgeries by the end of the third year of operations. South Miami would lose nine and Kendall would lose six open heart cases. Neither an Aventura nor a Palmetto area program will keep the existing low volume providers below 300 or 350 open heart surgeries. With or without them, South Miami and Kendall are expected to continue to operate below the objective set by the open heart rule. The absence of a material adverse impact on low volume providers is the result of the absence of any overlap in the service areas of the applicants and South Miami and Kendall. In District 11, only Cedars is likely to end up having open heart surgery volumes in a range between 300 and 350 cases as a result of the approval of both programs. Difficulties and delays in patient transfers for open heart or angioplasty services were raised as possible not normal circumstances in Dade County. Aventura Hospital witnesses presented anecdotal evidence of patients who could have benefited from the availability of angioplasty and open heart case without transfers. The evidence was inadequate to demonstrate that access to existing facilities is not available within a reasonable time. Palmetto General provided a review of medical charts to show patients whose outcomes would have been improved if it had an open heart program. Physicians who testified about those patients differed in their conclusions concerning the urgency of transfers, the need for primary angioplasty or thrombolytics, and the causes of delays. No medical records indicated patient outcomes after they were transferred. Aventura Hospital and Palmetto General also contend that the residents of their primary service area are at a disadvantage by not having timely access to primary angioplasty for patients who are having heart attacks. Treatment in their ERs is limited to administering thrombolytic or clot-busting drugs in an effort to save heart muscle. Increasingly, research has shown the benefits of primary angioplasty over thrombolytics as the most effective treatment to restore blood flow to heart muscle. The benefits include lower mortality rates and few complications, and are enhanced if the "door-to-balloon" time is less than 90 minutes. In Dade County, transfer times typically range from two to five hours, including the time to contact a receiving facility, to find a receiving physician, to receive insurance authorization, to summon an ambulance, and to prepare the patient medically for transfer, as well as the actual travel time. Research also shows that the quality of an open heart surgery program continues to be linked to its volume. In Florida, AHCA has not revised its rules either to provide for angioplasty services without open heart surgery back-up, or to reduce the tertiary designation of open heart surgery programs. Therefore, the need for more timely access to angioplasty is rejected as a not normal access issue. Palmetto General, due to operational difficulties is unlikely to meet the 90-minute reperfusion goal. In fact, most hospitals with open heart programs do not. Palmetto General does not plan to construct a second cardiac cath lab for use at the time it establishes an open heart program. Mount Sinai witnesses questioned the ability of a hospital with one cath lab to provide emergency primary angioplasty services. An additional cath lab is not required in the open heart rule and, while difficulties in scheduling are likely to occur, successful open heart programs have been operated with one cath lab initially, including Tenet-operated Delray Medical Center. Palmetto General can, when needed, construct a second cardiac cath lab in approximately six months without CON review. AHCA has not revised the open heart surgery rule to respond to the development of primary angioplasty as a preferred treatment. By its adoption of a new rule maintaining the link between angioplasty and open heart surgery, and maintaining the tertiary nature of open heart surgery, AHCA has placed the State of Florida on the side of the debate which is more concerned about the link between volumes and quality in open heart programs. Palmetto General also attempted to demonstrate the existence of access constraints at Jackson Memorial. The evidence showed discrepancies in lengths of stay, with indigent patients generally hospitalized longer. But those discrepancies were subject to other interpretations, including the possibility that indigent patients are more sick because lengths of stay were longer before and after indigent patients are transferred to and from Jackson Memorial. The maldistribution of open heart programs in Dade County as compared to the areas of significant population growth is a not normal circumstance affecting the availability, access, extent of utilization, and quality of care of existing facilities in the district. The commitment to the closure of an existing program is also a not normal circumstance in favor of the Aventura Hospital proposal. Subsection 408.035(3) - applicant's quality of care; Rule 59C- 1.030(2)(f) - accessibility of facility as a whole; Subsection 408.035(10) - costs and methods of construction. The parties stipulated that both Aventura Hospital and Palmetto General have a record of providing quality care with regard to the scope and intensity of services provided historically, and that both are accredited by the Joint Commission on Accreditation of Health Care Organizations. The parties also stipulated that both applicants can establish quality perfusion services and recruit qualified perfusionists at the costs identified in their applications. Palmetto General failed to identify any surgeons who would staff their proposed open heart program. Two cardiac surgeons in a group which submitted a letter of interest included in the Palmetto General CON application were killed in a car accident a month before the final hearing. While the absence of named surgeons affects the certainty of referrals, there is no requirement, in AHCA rules, that surgeons be named in CON applications. One board-certified and a second at least board-eligible surgeon must be on the hospital staff if it starts an open heart program. Tenet has the resources and the senior management at Palmetto General has the experience to recruit qualified medical and nursing staff. The plan for a four-bed CVICU at Palmetto General was criticized as allocating too few beds for open heart surgery patients. Using the normile statistical methodology, one expert witness testified that a six-bed CVICU is required to accommodate the expected patient census in the third year of an open heart program. Using an average daily census of 1.43 patients and a target occupancy rate of 70 percent in the four-bed CVICU, however, only two beds are needed in the first year. Subsequently, as needed, acute care beds may be converted to ICU beds without CON review. Subsection 408.035(4) - needs that are not reasonably and economically accessible in adjoining areas. Mount Sinai contends that the residents of the Aventura and Hialeah areas reasonably and economically receive open heart services in Broward County. The statistical data and evidence of capacity constraints, even after the Miramar hospital is constructed, and the closure of one of the programs that residents of the Aventura Hospital primary service area have relied on and its relocation to their area, is more appropriate than increasing their reliance on Memorial Regional. The evidence does not demonstrate that the residents of the Palmetto General service area have reasonable access to Cleveland Clinic, Memorial Regional or any other Broward County hospital with an open heart surgery program. Subsection 408.035(5) - needs of research and educational facilities. Aventura Hospital is not a statutory teaching hospital. It does have podiatry, nursing, and occupational and physical therapy students training at the hospital. Residents and interns from the primary care program at Nova Southeastern University, from the Barry University School of Podiatry, and area nursing and technical schools receive some of their training at Palmetto General. Although one rating service places Palmetto General in the category of a teaching hospital, it is not a statutory teaching hospital. A program at Aventura Hospital will have a greater adverse effect on Mount Sinai, while one at Palmetto General will have a greater adverse effect on Jackson Memorial. Both Mount Sinai and Jackson Memorial are statutory teaching hospitals. Subsection 408.035(6) - management personnel and funds for project accomplishment; Subsection 408.035(8) - immediate and long term financial feasibility. Both Aventura Hospital and Palmetto General have adequate funds and experienced management to establish open heart surgery programs. In the pre-hearing stipulation, the parties agreed that the applicants have sufficient available funds for capital and operating expenses to initiate open heart surgery programs and to operate the programs, in the short term, until financially self- sufficient. Aventura Hospital reasonably projected net profits of approximately $543,000 from an open heart program in the first year of operation, and $1 million in the second year. Aventura Hospital reasonably relied on the experiences of other HCA open heart providers in the area, particularly Miami Heart and JFK Medical Center in Palm Beach County. Mount Sinai questioned the reasonableness of Palmetto General's projection that it will generate higher profits than Aventura Hospital with lower case volumes. It also questioned Palmetto General's ability to attain the volumes projected. Palmetto General projected a net profit of just over $700,000 in the first year, $1.18 million in the second year, and $1.5 million in the third year, with 148 open heart cases in the first year, 210 in the second year, and 250 in the third year. By comparison, Aventura Hospital's first three-year projections for open hearts were 240, 312, and 347. Aventura's projected volume was potentially overstated in view of the experience at HCA facility Columbia Westside in Broward County which has achieved approximately half the open hearts projected. But the differences in projections reasonably reflect Aventura's draw from a smaller but older population and Palmetto General's draw from a larger, poorer but younger population. Palmetto General's projected volumes are reasonable considerating the number of actual open heart surgeries, 668, originating from its primary service area in the 12-months ending in June 2001. Palmetto General reasonably and conservatively based its reimbursement rates on those received at Florida Medical Center in Broward County, which actually has a lower reimbursement rate than Dade County. Mount Sinai also demonstrated that charges at three South Florida Tenet facilities, Delray Medical Center, North Ridge Medical Center, and Florida Medical Center were significantly higher than those at Mount Sinai. But those facilities operate successfully in competitive markets in Districts 9 and 10, which supports the testimony that, for open heart surgery, charges are not very relevant. Most compensation is derived from fixed-rate reimbursement from Medicare. Subsection 408.035(9) - extent to which proposal fosters competition that promotes quality and cost effectiveness. In the District, HCA, the parent of Aventura Hospital, after the sale of Miami Heart, continues to operate Cedars, which has exceeded 350 cases for the first time in 2001, and Kendall, which at 295 cases in 2001, has been a chronically low volume open heart provider. That would raise doubts about the projected volumes at Aventura Hospital, but for the demographics of its location and the closure and, in effect, proposed relocation of the Miami Heart program to a more geographically appropriate area of the District. The relocation, therefore, makes the proposal a "wash" resulting in no net increase in programs or competition in the District. By contrast, the approval of a program operated by Tenet which has five Dade County hospitals, none with an open heart program, does introduce a new provider into the market in a location with special needs due to the larger critical mass of people, their ethnicity, relative poverty and fewer, more distant alternate open heart providers. Subsection 408.035(12) - nursing home beds. The criterion related to nursing home beds, by stipulation of the parties, is inapplicable to this case. Summary of Findings On balance, Palmetto General is preferable as the hospital with the larger critical mass of population, the status as a disproportionate share provider of Medicaid and Medicare, the improved geographical access for a large ethnic group with relatively high IHD and heavy demands for services, including cardiac care services in its ER and in the ERs of other hospitals within its primary service area. In addition, the detriment to existing providers, predominantly Mount Sinai and Jackson Memorial will not reduce the volumes below 350 open heart cases. On balance, the Aventura Hospital proposal, while less compelling, because it is not a Medicaid disproportionate share hospital, is not a new entrant to the market, and has a population which is half that in the Palmetto General primary service is also entirely approvable. The hospital has facilities superior to those at Palmetto General. It is better prepared to implement an open heart program, with plans to open a second cardiac cath lab immediately and with the cardiothoracic surgeons identified for the program. Within its service area population, Aventura Hospital has a large population of elderly people, who present to its hospital with symptoms of heart attacks. The troubling adverse impact on Memorial Regional is offset by the evidence of crowding and scheduling difficulties specifically in the Memorial Regional cardiac cath lab. The troubling adverse impact on the combined Miami Heart and Mount Sinai programs is offset by the Asset Purchase Agreement which contemplated the relocation of at least a portion of the Miami Heart cases to Aventura Hospital. Even with the additional loss of 100 open heart cases to Palmetto General, Mount Sinai will remain the largest Dade County provider, retaining from 900 to 1,000 annual open heart cases. The approval of both applications will improve access to open heart surgery and angioplasty care in District 11.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered issuing CON Application No. 9394 to Lifemark Hospitals of Florida, Inc., d/b/a Palmetto General Hospital, and CON Application No. 9395 to Miami Beach Healthcare Group, Ltd., d/b/a Aventura Hospital and Medical Center. DONE AND ENTERED this 14th day of April, 2003, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 2003. COPIES FURNISHED: Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Michael O. Mathis, Esquire Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403 C. Gary Williams, Esquire Michael J. Glazer, Esquire Ausley & McMullen 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 Geoffrey D. Smith, Esquire Sandra L. Schoonover, Esquire Blank, Meenan & Smith, P.A. 204 South Monroe Street Post Office Box 11068 Tallahassee, Florida 32302-3068 Stephen A. Ecenia, Esquire R. David Prescott, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551
The Issue Whether the Certificate of Need application (CON 9239) of Galencare, Inc., d/b/a Brandon Regional Hospital ("Brandon") to establish an open heart surgery program at its hospital facility in Hillsborough County should be granted?
Findings Of Fact District 6 District 6 is one of eleven health service planning districts in Florida set up by the "Health Facility and Services Development Act," Sections 408.031-408.045, Florida Statutes. See Section 408.031, Florida Statutes. The district is comprised of five counties: Hillsborough, Manatee, Polk, Hardee, and Highlands. Section 408.032(5), Florida Statutes. Of the five counties, three have providers of adult open heart surgery services: Hillsborough with three providers, Manatee with two, and Polk with one. There are in District 6 at present, therefore, a total of six existing providers. Existing Providers Hillsborough County The three providers of open heart surgery services ("OHS") in Hillsborough County are Florida Health Sciences Center, Inc., d/b/a Tampa General Hospital ("Tampa General"), St. Joseph's Hospital, Inc. ("St. Joseph's"), and University Community Hospital, Inc., d/b/a University Community Hospital ("UCH"). For the most part, Interstate 75 runs in a northerly and southerly direction dividing Hillsborough County roughly in half. If the interstate is considered to be a line dividing the eastern half of the county from the western, all three existing providers are in the western half of the county within the incorporated area of the county's major population center, the City of Tampa. Tampa General Opened approximately a century ago, Tampa General has been at its present location in the City of Tampa on Davis Island at the north end of Tampa Bay since 1927. The mission of Tampa General is three-fold. First, it provides a range of care (from simple to complex) for the west central region of the state. Second, it supports both the teaching and research activities of the University of South Florida College of Medicine. Finally and perhaps most importantly, it serves as the "health care safety net" for the people of Hillsborough County. Evidence of its status as the safety net for those its serves is its Case Mix Index for Medicare patients: 2.01. At such a level, "the case mix at Tampa General is one of the highest in the nation in Medicare population." (Tr. 2452). In keeping with its mission of being the county's health care safety net, Tampa General is a full-service acute care hospital. It also provides services unique to the county and the Tampa Bay area: a Level I trauma center, a regional burn center and adult solid organ transplant programs. Tampa General is licensed for 877 beds. Of these, 723 are for acute care, 31 are designated skilled nursing beds, 59 are comprehensive rehabilitation beds, 22 are psychiatry beds, and 42 are neonatal intensive care beds (18 Level II and 24 Level III). Of the 723 acute care beds, 160 are set aside for cardiac care, although they may be occupied from time-to-time by non-cardiac care patients. Tampa General is a statutory teaching hospital. It has an affiliation with the University of South Florida College of Medicine. It offers 13 residency programs, serving approximately 200 medical residents. Tampa General offers diagnostic and interventional cardiac catheterization services in four laboratories dedicated to such services. It has four operating rooms dedicated to open heart surgery. The range of open heart surgery services provided by Tampa General includes heart transplants. Care of the open heart patient immediately after surgery is in a dedicated cardiovascular intensive care unit of 18 beds. Following stay in the intensive care unit, the patient is cared for in either a 10-bed intermediate care unit or a 30- bed telemetry unit. Tampa General's full-service open heart surgery program provides high quality of care. St. Joseph's Founded by the Franciscan Sisters of Allegheny, New York, St. Joseph's is an acute care hospital located on Martin Luther King Boulevard in an "inner city kind of area" (Tr. 1586) of the City of Tampa near the geographic center of Hillsborough County. On the hospital campus sit three separate buildings: the main hospital, consisting of 559 beds; across the street, St. Joseph's Women's Hospital, a 197-bed facility dedicated to the care of women; and, opened in 1998, Tampa Children's Hospital, a 120-bed free-standing facility that offers pediatric services and Level II and Level III neonatal intensive care services. In addition to the women's and pediatric facilities, and consistent with the full-service nature of the hospital, St. Joseph's provides behavioral health and oncology services, and most pertinent to this proceeding, open heart surgery and related cardiovascular services. Designated as a Level 2 trauma center, St. Joseph's has a large and active emergency department. There were 90,211 visits to the Emergency Room in 1999, alone. Of the patients admitted annually, fifty-five percent are admitted through the Emergency Room. The formal mission of St. Joseph's organization is to take care of and improve the health of the community it serves. Another aspect of the mission passed down from its religious founders is to take care of the "marginalized, . . . the people that in many senses cannot take care of themselves, [those to whom] society has . . . closed [its] eyes . . .". (Tr. 1584). In keeping with its mission, it is St. Joseph's policy to provide care to anyone who seeks its hospital services without regard to ability to pay. In 1999, the hospital provided $33 million in charity care, as that term is defined by AHCA. In total, St. Joseph's provided $121 million in unfunded care during the same year. Not surprisingly, St. Joseph's is also a disproportionate Medicaid provider. The only hospital in the district that provides both adult and pediatric open heart surgery services, St. Joseph's has three dedicated OHS surgical suites, a 14-bed unit dedicated to cardiovascular intensive care for its adult OHS patients, a 12-bed coronary care unit and 86 progressive care beds, all with telemetry capability. St. Joseph's provides high quality of care in its OHS. UCH University Community Hospital, Inc., is a private, not-for-profit corporation. It operates two hospital facilities: the main hospital ("UCH") a 431-bed hospital on Fletcher Avenue in north Tampa, and a second 120-bed hospital in Carrollwood. UCH is accredited by the JCAHO "with commendation," the highest rating available. It provides patient care regardless of ability to pay. UCH's cardiac surgery program is called the "Pepin Heart & Vascular Institute," after Art Pepin, "a 14-year heart transplant recipient [and] . . . the oldest heart transplant recipient in the nation alive today." (Tr. 2841). A Temple Terrace resident, Mr. Pepin also helped to fund the start of the institute. Its service area for tertiary services, including OHS, includes all of Hillsborough County, and extends into south Pasco County and Polk County. The Pepin Institute has excellent facilities and equipment. It has three dedicated OHS operating suites, three fully-equipped "state-of-the-art" cardiac catheterization laboratories equipped with special PTCA or angioplasty devices, and several cardiology care units specifically for OHS/PTCA services. Immediately following surgery, OHS patients go to a dedicated 8-bed cardiovascular intensive care unit. From there patients proceed to a dedicated 20-bed progressive care unit ("PCU"), comprised of all private rooms. There is also a 24-bed PCU dedicated to PTCA patients. There is another 22-bed interventional unit that serves as an overflow unit for patients receiving PTCA or cardiac catheterization. UCH has a 22-bed medical cardiology unit for chest pain observation, congestive heart failure, and other cardiac disorders. Staffing these units requires about 110 experienced, full-time employees. UCH has a special "chest pain" Emergency Room with specially-trained cardiac nurses and defined protocols for the treatment of chest pain and heart attacks. UCH offers a free van service for its UCH patients and their families that operates around the clock. As in the case of the other two existing providers of OHS services in Hillsborough Counties, UCH provides a full range of cardiovascular services at high quality. Manatee County The two existing providers of adult open heart surgery services in Manatee County are Manatee Memorial Hospital, Inc., and Blake Medical Center, Inc. Neither are parties in this proceeding. Although Manatee Memorial filed a petition for formal administrative hearing seeking to overturn the preliminary decision of the Agency, the petition was withdrawn before the case reached hearing. Polk County The existing provider of adult open heart surgery services in Polk County is Lakeland Regional Medical Center, Inc. ("Lakeland"). Licensed for 851 beds, Lakeland is a large, not-for- profit, tertiary regional hospital. In 1999, Lakeland admitted approximately 30,000 patients. In fiscal 1999, there were about 105,000 visits to Lakeland's Emergency Room. Lakeland provides a wide range of acute care services, including OHS and diagnostic and therapeutic cardiac catheterization. It draws its OHS patients from the Lakeland urban area, the rest of Polk County, eastern Hillsborough County (particularly from Plant City), and some of the surrounding counties. Lakeland has a high quality OHS program that provides high quality of care to its patients. It has two dedicated OHS surgical suites and a third surgical suite equipped and ready for OHS procedures on an as-needed basis. Its volume for the last few years has been relatively flat. Lakeland offers interventional radiology services, a trauma center, a high-risk obstetrics service, oncology, neonatal intensive care, pediatric intensive care, radiation therapy, alcohol and chemical dependency, and behavioral sciences services. Lakeland treats all patients without regard to their ability to pay, and provides a substantial amount of charity care, amounting in fiscal year 1999 to $20 million. The Applicant Brandon Regional Hospital ("Brandon") is a 255-bed hospital located in Brandon, Florida, an unincorporated area of Hillsborough County east of Interstate 75. Included among Brandon's 255 beds are 218 acute care beds, 15 hospital-based skilled nursing unit beds, 14 tertiary Level II neonatal intensive care unit ("NICU") beds, and 8 tertiary Level III NICU beds. Brandon offers a wide array of medical specialties and services to its patients including cardiology; internal medicine; critical care medicine; family practice; nephrology; pulmonary medicine; oncology/hematology; infectious disease; neurology; psychiatry; endocrinology; gastroenterology; physical medicine; rehabilitation; radiation oncology; pathology; respiratory therapy; and anesthesiology. Brandon operates a mature cardiology program which includes inpatient diagnostic cardiac catheterization, outpatient diagnostic cardiac catheterization, electrocardiography, stress testing, and echocardiography. The Brandon medical staff includes 22 Board-certified cardiologists who practice both interventional and invasive cardiology. Board certification is a prerequisite to maintaining cardiology staff privileges at Brandon. Brandon's inpatient diagnostic cardiac catheterization program was initiated in 1989 and has performed in excess of 800 inpatient diagnostic cardiac catheterization procedures per year since 1996. Brandon's daily census has increased from 159 to 187 for the period 1997 to 1999 commensurate with the burgeoning population growth in Brandon's primary service area. Brandon's Emergency Room is the third busiest in Hillsborough County and has more visits than Tampa General's Emergency Room. From 1997- 1999, Brandon's Emergency Room visits increased from 43,000 to 53,000 per year and at the time of hearing were expected to increase an additional 5-6 percent during the year 2000. Brandon has also recently expanded many services to accommodate the growing health care needs of the Brandon community. For example, Brandon doubled the square footage of its Emergency Room and added 17 treatment rooms. It has also implemented an outpatient diagnostic and rehabilitation center, increased the number of labor, delivery and recovery suites, and created a high-risk ante-partum observation unit. Brandon was recently approved for 5 additional tertiary Level II NICU beds and 3 additional tertiary Level III NICU beds which increased Brandon's Level II/III NICU bed complement to 22 beds. Brandon is a Level 5 hospital within HCA's internal ranking system, which is the company's highest facility level in terms of service, revenue, and patient service area population. Brandon has been ranked as one of the Nation's top 100 hospitals by HCIA/Mercer, Inc., based on Brandon's clinical and financial performance. The Proposal On September 15, 1999, Brandon submitted to AHCA CON Application 9239, its third application for an open heart surgery program in the past few years. (CON 9085 and 9169, the two earlier applications, were both denied.) The second of the three, CON 9169, sought approval on the basis of the same two "not normal" circumstances alleged by Brandon to justify approval in this proceeding. CON 9239 addresses the Agency's January 2002 planning horizon. Brandon proposes to construct two dedicated cardiovascular operating rooms ("CV-OR"), a six-bed dedicated cardiovascular intensive care unit ("CVICU"), a pump room and sterile prep room all located in close proximity on Brandon's first floor. The costs, methods of construction, and design of Brandon's proposed CV-OR, CVICU, pump room, and sterile prep room are reasonable. As a condition of CON approval, Brandon will contribute $100,000 per year for five years to the Hillsborough County Health Care Program for use in providing health care to the homeless, indigent, and other needy residents of Hillsborough County. The administration at Brandon is committed to establishing an adult open heart surgery program. The proposal is supported by the medical and nursing staff. It is also supported by the Brandon community. The Brandon Community in East Hillsborough County Brandon, Florida, is a large unincorporated community in Hillsborough County, east of Interstate 75. The Brandon area is one of the fastest growing in the state. In the last ten years alone, the area's population has increased from approximately 90,000 to 160,000. An incorporated Brandon municipality (depending on the boundaries of the incorporation) has the potential to be the eighth largest city in Florida. The Brandon community's population is projected to further increase by at least 50,000 over the next five to ten years. Brandon Regional Hospital's primary service area not only encompasses the Brandon community, but further extends throughout Hillsborough County to a populous of nearly 285,000 persons. The population of Brandon's primary service area is projected to increase to 309,000 by the year 2004, of which approximately 32,000 are anticipated to be over the age of 65, making Brandon's population "young" relative to much of the rest of the State. The community of Brandon has attracted several new large housing developments which are likely to accelerate its projected growth. According to the Hillsborough County City- County Planning Commission, six of the eleven largest subdivisions of single-family homes permitted in 1998 are located nearby. For example, the infrastructure is in place for an 8,000-acre housing development east of Brandon which consists of 7,500 homes and is projected to bring in 30,000 people over the next 5-10 years. Two other large housing developments will bring an additional 5,000-10,000 persons to the Brandon area. The community of Brandon is also an attractive area for relocating businesses. Recent additions to the Brandon area include, among others, CitiGroup Corporation, Atlantic Lucent Technologies, Household Finance, Ford Motor Credit, and Progressive Insurance. CitiGroup Corporation alone supplemented the area's population with approximately 5,000 persons. The community of Brandon has experienced growth in the development of health care facilities with 5 new assisted living facilities and one additional assisted living facility under construction. The average age of the residents of these facilities is much higher than of the Brandon area as a whole. Existing Providers' Distance from Brandon's PSA Brandon's primary service area ("PSA") is comprised of 12 zip code areas "in and around Brandon, essentially eastern Hillsborough County." (Tr. 1071). Using the center of each zip code in Brandon's primary service area as the location for each resident of the zip code area, the residents of Brandon's PSA are an average of 15 miles from Tampa General, 16.4 miles from St. Joseph's, 17.3 miles from UCH and 24.6 miles from Lakeland Regional Medical Center. In contrast, they are only 7.7 miles from Brandon Regional Hospital. Using the same methodology, the residents of Brandon's PSA are an average of more than 40 miles from Blake Medical Center (44.9 miles) and Manatee Memorial (41 miles). Numeric Need Publication Rule 59C-1.033, Florida Administrative Code (the "Open Heart Surgery Program Rule" or the "Rule") specifies a methodology for determining numeric need for new open heart surgery programs in health planning districts. The methodology is set forth in section (7) of the Rule. Part of the methodology is a formula. See subsection (b) of Section (7) of the Rule. Using the formula, the Agency calculated numeric need in the District for the January 2002 Planning Horizon. The calculation yielded a result of 3.27 additional programs needed to serve the District by January 1, 2002. But calculation of numeric need under the formula is not all that is entailed in the complete methodology for determining numeric need. Numeric need is also determined by taking other factors into consideration. The Agency is to determine net need based on the formula "[p]rovided that the provisions of paragraphs (7)(a) and (7) (c) do not apply." Rule 59C-1.033(b), Florida Administrative Code. Paragraph (7)(a) states, "[a] new adult open heart surgery program shall not normally be approved in the district" if the following condition (among others) exists: 2. One or more of the operational adult open heart surgery programs in the district that were operational for at least 12 months as of 3 months prior to the beginning date of the quarter of the publication of the fixed need pool performed less than 350 adult open heart surgery operations during the 12 months ending 3 months prior to the beginning date of the quarter of the publication of the fixed need pool; . . . Rule 59C-1.033(7)(a), Florida Administrative Code. Both Blake Medical Center and Manatee Memorial Hospital in Manatee County were operational and performed less that 350 adult open heart surgery operations in the qualifying time periods described by subparagraph (7)(a)2., of the Rule. (Blake reported 221 open heart admissions for the 12-month period ending March 31, 1999; Manatee Memorial for the same period reported 319). Because of the sub-350 volume of the two providers, the Rule's methodology yielded a numeric need of "0" new open heart surgery programs in District 6 for the January 2002 Planning Horizon. In other words, the numeric need of 3.27 determined by calculation pursuant to the formula prior to consideration of the programs described in (7)(a)2.1, was "zeroed out" by operation of the Rule. Accordingly, a numeric need of zero for the district in the applicable planning horizon was published on behalf of the Agency in the January 29, 1999, issue of the Florida Administrative Weekly. No Impact on Manatee County Providers In 1998, only one resident of Brandon's PSA received an open heart surgery procedure in Manatee County. For the same period only two residents from Brandon's PSA received an angioplasty procedure in Manatee County. These three residents received the services at Manatee Memorial. Of the two Manatee County programs, Manatee Memorial consistently has a higher volume of open heart surgery cases and according to the latest data available at the time of hearing has "hit the mark" (Tr. 1546) of 350 procedures annually. Very few residents from other District 6 counties receive cardiac services in Manatee County. Similarly, very few Manatee county residents migrate from Manatee County to another District 6 hospital to receive cardiac services. In 1998, only 19 of a total 1,209 combined open heart and angioplasty procedures performed at either Blake or Manatee Memorial originated in the other District 6 counties and only two were from the Brandon area. Among the 6,739 Manatee County residents discharged from a Florida hospital in calendar year 1998 following any cardiovascular procedure (MDC-5), only 58(0.9 percent) utilized one of the other providers in District 6, and none were discharged from Brandon. Among the 643 open heart surgeries performed on Manatee County residents in 1998, only 17 cases were seen at one of the District 6 open heart programs outside of Manatee County. There is, therefore, practically no patient exchange between Manatee County and the remainder of the District. In sum, there is virtually no cardiac patient overlap between Manatee County and Brandon's primary service area. The development of an open heart surgery program at Brandon will have no appreciable or meaningful impact on the Manatee County providers. CON 9169 In CON 9169, Brandon applied for an open heart surgery program on the basis of special circumstances due to no impact on low volume providers in Manatee County. The application was denied by AHCA. The State Agency Action Report ("SAAR") on CON 9169, dated June 17, 1999, in a section of the SAAR denominated "Special Circumstances," found the application to demonstrate "that a program at Brandon would not impact the two Manatee hospitals . . .". (UCH Ex. No. 6, p. 5). The "Special Circumstances" section of the SAAR on CON 9169, however, does not conclude that the lack of impact constitutes special circumstances. In follow-up to the finding of the application's demonstration of no impact to the Manatee County, the SAAR turned to impact on the non-Manatee County providers in District The SAAR on CON 9169 states, "it is apparent that a new program in Brandon would impact existing providers [those in Hillsborough and Polk Counties] in the absence of significant open heart surgery growth." Id. In reference to Brandon's argument in support of special circumstances based on the lack of impact to the Manatee County providers, the CON 9169 SAAR states: [T]he applicant notes the open heart need formula should be applied to District 6 excluding Manatee County, which would result in the need for several programs. This argument ignores the provision of the rule that specifies that the need cannot exceed one. (UCH No. 6, p. 7). The Special Circumstances Section of the SAAR on CON 9169 does not deal directly with whether lack of impact to the Manatee County providers is a special circumstance justifying one additional program. Instead, the Agency disposes of Brandon's argument in the "Summary" section of the SAAR. There AHCA found Brandon's special circumstances argument to fail because "no impact on low volume providers" is not among those special circumstances traditionally or previously recognized in case law and by the Agency: To demonstrate need under special circumstances, the applicant should demonstrate one or more of the following reasons: access problems to open heart surgery; capacity limits of existing providers; denial of access based on payment source or lack thereof; patients are seeking care outside the district for service; improvement of care to underserved population groups; and/or cost savings to the consumer. The applicant did not provide any documentation in support of these reasons. (UCH No. 6, p. 29). Following reference to the Agency's publication of zero need in District 6, moreover, the SAAR reiterated that [t]he implementation of another program in Hillsborough County is expected to significantly [a]ffect existing programs, in particular Tampa General Hospital, an important indigent care provider. (Id.) Typical "not normal circumstances" that support approval of a new program were described at hearing by one health planner as consisting of a significant "gap" in the current health care delivery system of that service. Typical Not Normal Circumstances Just as in CON 9169, none of the typical "not normal" circumstances" recognized in case law and with which the Agency has previous experience are present in this case. The six existing OHS programs in District 6 have unused capacity, are available, and are adequate to meet the projected OHS demand in District 6, in Hillsborough County ("County"), and in Brandon's proposed primary service area ("PSA"). All three County OHS providers are less than 17 miles from Brandon. There are, therefore, no major service geographic gaps in the availability of OHS services. Existing providers in District 6 have unused capacity to meet OHS projected demand in January 2002. OHS volume for District 6 will increase by only 179 surgeries. This is modest growth, and can easily be absorbed by the existing providers. In fact, existing OHS providers have previously handled more volume than what is projected for 2002. In 1995, 3,313 OHS procedures were generated at the six OHS programs. Yet, only 3,245 procedures are projected for 2002. The demand in 1995 was greater than what is projected for 2002. Neither population growth nor demographic characteristics of Brandon's PSA demonstrate that existing programs cannot meet demand. The greatest users of OHS services are the elderly. In 1999, the percentage in District 6 was similar to the Florida average; 18.25 percent for District 6, 18.38 percent for the state. The elderly percentage in Hillsborough County was less: 13.21 percent. The elderly component in Brandon's PSA was less still: 10.44 percent. In 2004, about 18.5 percent of Florida and District 6 residents are projected to be elderly. In contrast, only 10.5 percent of PSA residents are expected to be elderly. Brandon's PSA is "one of the younger defined population segments that you could find in the State of Florida" (Tr. 2892) and likely to remain so. Brandon's PSA will experience limited growth in OHS volume. Between 1999 - 2002, OHS volume will grow by only 36. The annual growth thereafter is only 13 surgeries. This is "very modest" growth and is among the "lowest numbers" of incremental growth in the State. Existing OHS providers can easily absorb this minimal growth. Brandon's PSA, is not an underserved area . . . there is excellent access to existing providers and . . . the market in this service area is already quite competitive. There is not a single competitor that dominates. In fact, the four existing providers [in Hillsborough and Polk Counties] compete quite vigorously. (Tr. 2897). Existing OHS programs in District 6 provide very good quality of care. The surgeons at the programs are excellent. Dr. Gandhi, testifying in support of Brandon's application, testified that he was very comfortable in referring his patients for OHS services to St. Joseph and Tampa General, having, in fact, been comfortable with his father having had OHS at Tampa General. Likewise, Dr. Vijay and his group, also supporters of the Brandon application, split time between Bayonet Point and Tampa General. Dr. Vijay is very proud to be associated with the OHS program at Tampa General. Lakeland also operates a high quality OHS program. In its application, Brandon did not challenge the quality of care at the existing OHS programs in District 6. Nor did Brandon at hearing advance as reasons for supporting its application, capacity constraints, inability of existing providers to absorb incremental growth in OHS volume or failure of existing providers to meet the needs of the residents of Brandon's primary service area. The Agency, in its preliminary decision on the application, agreed that typical "not normal" circumstances in this case are not present. Included among these circumstances are those related to lack of "geographic access." The Agency's OHS Rule includes a geographic access standard of two hours. It is undisputed that all District 6 residents have access to OHS services at multiple OHS providers in the District and outside the District within two hours. The travel time from Brandon to UCH or Tampa General, moreover, is usually less than 30 minutes anytime during the day, including peak travel time. Travel time from Brandon to St. Joseph's is about 30 minutes. There are times, however, when travel time exceeds 30 minutes. There have been incidents when traffic congestion has prevented emergency transport of Brandon patients suffering myocardial infarcts from reaching nearby open heart surgery providers within the 30 minutes by ground ambulance. Delays in travel are not a problem in most OHS cases. In the great majority, procedures are elective and scheduled in advance. OHS procedures are routinely scheduled days, if not weeks, after determining that the procedure is necessary. This high percentage of elective procedures is attributed to better management of patients, better technology, and improved stabilizing medications. The advent of drugs such as thrombolytic therapy, calcium channel blockers, beta blockers, and anti-platelet medications have vastly improved stabilization of patients who present at Emergency Rooms with myocardial infarctions. In its application, Brandon did not raise outmigration as a not-normal circumstance to support its proposal and with good reason. Hillsborough County residents generally do not leave District 6 for OHS. In fact, over 96 percent of County residents receive OHS services at a District 6 provider. Lack of out-migration shows two significant facts: (a) existing OHS programs are perceived to be reasonably accessible; and (2) County residents are satisfied with the quality of OHS services they receive in the County. This 96 percent retention rate is even more impressive considering there are many OHS programs and options available to County residents within a two-hour travel time. In contrast, there are two low-volume OHS providers in Manatee County, one of them being Blake. Unlike Hillsborough County residents, only 78 percent of Manatee County residents remain in District 6 for OHS services. Such outmigration shows that these residents prefer to bypass closer programs, and travel further distances, to receive OHS services at high-volume facility in District 8, which they regard as offering a higher quality of service. In its Application, Brandon does not raise economic access as a "not normal" circumstance. In fact, Brandon concedes that the demand for OHS services by Medicaid and indigent patients is very limited because Brandon's PSA is an affluent area. Brandon does not "condition" its application on serving a specific number or percentage of Medicaid or indigent patients. There are no financial barriers to accessing OHS services in District 6. All OHS providers in Hillsborough County and LRMC provide services to Medicaid and indigent patients, as needed. Approving Brandon is not needed to improve service or care to Medicaid or indigent patient populations. Tampa General is the "safety net" provider for health care services to all County residents. Tampa General is an OHS provider geographically accessible to Brandon's PSA. Tampa General actively services the PSA now for OHS. Brandon did not demonstrate cost savings to the patient population of its PSA if it were approved. Approving Brandon is not needed to improve cost savings to the patient population. Brandon based its OHS and PTCA charges on the average charge for PSA residents who are serviced at the existing OHS providers. While that approach is acceptable, Brandon does not propose a charge structure which is uniquely advantageous for patients. Restated, patients would not financially benefit if Brandon were approved. Tertiary Service Open Heart Surgery is defined as a tertiary service by rule. A "tertiary health service" is defined in Section 408.032(17), Florida Statutes, as follows: health service, which, due to its high level of intensity, complexity, specialized or limited applicability, and cost, should be limited to, and concentrated in, a limited number of hospitals to ensure the quality, availability, and cost- effectiveness of such service. As a tertiary service, OHS is necessarily a referral service. Most hospitals, lacking OHS capability, transfer their patients to providers of the service. One might expect providers of open heart surgery in Florida in light of OHS' status as a tertiary service to be limited to regional centers of excellence. The reality of the six hospitals that provide open heart surgery services in District 6 defies this health-planning expectation. While each of the six provides OHS services of high quality, they are not "regional" centers since all are in the same health planning district. Rather than each being a regional center, the six together comprise more localized providers that are dispersed throughout a region, quite the opposite of a center for an entire region. Brandon's Allegations of Special Circumstances. Brandon presents two special circumstances for approval of its application. The first is that consideration of the low-volume Manatee County providers should not operate to "zero out" the numeric need calculated by the formula. The second relates to transfers and occasional problems with transfers for Brandon patients in need of emergency open heart services. "Time is Muscle" Lack of blood flow to the heart during a myocardial infarction ("MI") results in loss of myocardium (heart muscle). The longer the blood flow is disrupted or diminished, the more myocardium is lost. The more myocardium lost, the more likely the patient will die or, should the patient survive, suffer severe reduction in quality of life. The key to good patient outcome when a patient is experiencing an acute MI is prompt evaluation and rapid treatment upon presentation at the hospital. Restoration of blood flow to the heart (revascularization) is the goal of the treating physician once it is recognized that a patient is suffering an MI. If revascularization is not commenced within 2 hours of the onset of an acute MI, an MI patient's potential for recovery is greatly diminished. The need for prompt revascularization for a patient suffering an MI is summed up in the phrase "time is muscle," a phrase accepted as a maxim by cardiologists and cardiothoracic surgeons. Recent advances in modern medicine and technology have improved the ability to stabilize and treat patients with acute MIs and other cardiac traumas. The three primary treatment modalities available to a patient suffering from an MI are: 1) thrombolytics; 2) angioplasty and stent placement; and, 3) open heart surgery. Because of the advancement of the effectiveness of thrombolytics, thrombolytic therapy has become the standard of care for treating MIs. Thrombolytic therapy is the administration of medication to dissolve blood clots. Administered intravenously, thrombolytic medication begins working within minutes to dissolve the clot causing the acute MI and therefore halt the damage done by an MI to myocardium. The protocols to administer thrombolysis are similar among hospitals. If a patient presents with chest pain and the E.R. physician identifies evidence of an active heart attack, thrombolysis is normally administered. If the E.R. physician is uncertain, a cardiologist is quickly contacted to evaluate the patient. Achieving good outcomes in cases of myocardial infarctions requires prompt consultation with the patient, competent clinical assessment, and quick administration of appropriate treatment. The ability to timely evaluate patient conditions for MI, and timely administer thrombolytic therapy, is measured and evaluated nationally by the National Registry of Myocardial Infarction. The National Registry makes the measurement according to a standard known as "door-to-needle" time. This standard measures the time between the patient's presentation at the E.R. and the time the patient is initially administered thrombolytic medication by injection intravenously. Patients often begin to respond to thrombolysis within 10-15 minutes. Consistent with the maxim, "time is muscle," the shorter the door-to-needle time, the better the chance of the patient's successful recovery. The effectiveness of thrombolysis continues to increase. For example, the advent of a drug called Reapro blocks platelet activity, and has increased the efficacy rate of thrombolysis to at least 85 percent. As one would expect, then, thrombolytic therapy is the primary method of revascularization available to patients at Brandon. Due to the lack of open heart surgery backup, moreover, Brandon is precluded by Agency rule from offering angioplasty in all but the most extreme cases: those in which it is determined that a patient will not survive a transfer. While Brandon has protocols, authority, and equipment to perform angioplasty when a patient is not expected to survive a transfer, physicians are reluctant to perform angioplasty without open heart backup because of complications that can develop that require open heart surgery. Angioplasty, therefore, is not usually a treatment modality available to the MI patient at Brandon. Although the care of choice for MI treatment, thrombolytics are not always effective. To the knowledge of the cardiologists who testified in this proceeding, there is not published data on the percentage of patients for whom thrombolytics are not effective. But from the cardiologists who offered their opinions on the percentage in the proceeding, it can be safely found that the percentage is at least 10 percent. Thrombolytics are not ordered for these patients because they are inappropriate in the patients' individual cases. Among the contraindications for thrombolytics are bleeding disorders, recent surgery, high blood pressure, and gastrointestinal bleeding. Of the patients ineligible for thrombolytics, a subset, approximately half, are also ineligible for angioplasty. The other half are eligible for angioplasty. Under the most conservative projections, then at least 1 in 20 patients suffering an MI would benefit from timely angioplasty intervention for which open heart surgery back-up is required in all but the rarest of cases. In 1997, 351 people presented to Brandon's Emergency Room suffering from an acute MI. In 1998, the number of MIs increased to 427. In 1999, 428 patients presented to Brandon's Emergency Room suffering from an acute MI. At least 120 (10 percent) of the total 1206 MI patients presenting to Brandon's Emergency Room from 1997 to 1999 would have been ineligible for thrombolytics as a means of revascularization. Of these, half would have been ineligible for angioplasty while the other half would have been eligible. Sixty, therefore, is the minimum number of patients from 1997 to 1999 who would have benefited from angioplasty at Brandon using the most conservative estimate. Transfers of Emergency Patients Those patients who presented at Brandon's Emergency Room with acute MI and who could not be stabilized with thrombolytic therapy had to be transferred to one of the nearby providers of open heart surgery. In 1998, Brandon transferred an additional 190 patients who did not receive a diagnostic catheterization procedure at Brandon for either angioplasty or open heart surgery. For the first 9 months of 1999, 114 such transfers were made. Thus, in 1998 alone, Brandon transferred a total of 516 cardiac patients to existing providers for the provision of angioplasty or open heart surgery, more than any other provider in the District. In 1999, Brandon made 497 such transfers. Not all of these were emergency transfers, of course. But in the three years between 1997 and 1999 at least 60 patients were in need of emergency transfers who would benefit from angioplasty with open heart backup. Of those Brandon patients determined to be in need of urgent angioplasty or open heart surgery, all must be transferred to existing providers either by ambulance or by helicopter. Ambulance transfer is accomplished through ambulances maintained by the Hillsborough County Fire Department. Due to the cardiac patient's acuity level, ambulance transfer of such patients necessitates the use of ambulances equipped with Advanced Life Support Systems (ALS) in order to monitor the patient's heart functions and to treat the patient should the patient's condition deteriorate. Hillsborough County operates 18 ambulances. All have ALS capability. Patients with less serious medical problems are sometimes transported by private ambulances equipped with Basic Life Support Systems (BLS) that lack the equipment to appropriately care for the cardiac patient. But, private ambulances are not an option to transport critically ill cardiac patients because they are only equipped with BLS capability. Private ambulances, moreover, do not make interfacility transports of cardiac patients between Hillsborough County hospitals. There are many demands on the ambulance transfer system in Hillsborough County. Hillsborough County's 18 ALS ambulances cover in excess of 960 square miles. Of these 18 ambulances, only three routinely operate within the Brandon area. Hillsborough County ambulances respond to 911 calls before requests for interfacility transfers of cardiac patients and are extremely busy responding to automobile accidents, especially when it rains. As a result, Hillsborough County ambulances are not always available on a timely basis when needed to perform an interfacility transfer of a cardiac patient. At times, due to inordinate delay caused by traffic congestion, inter-facility ambulance transport, even if the ambulance is appropriately equipped, is not an option for cardiac patients urgently in need of angioplasty or open heart surgery. It has happened, for example, that an ambulance has appeared at the hospital 8 hours after a request for transport. Some cardiac surgeons will not utilize ground transport as a means of transporting urgent open heart and angioplasty cases. Expeditious helicopter transport in Hillsborough County is available as an alternative to ground transport. But, it too, from time-to-time, is problematic for patients in urgent need of angioplasty or open heart surgery. Tampa General operates two helicopters through AeroMed, only one of which is located in Hillsborough County. AeroMed's two helicopters are not exclusively devoted to cardiac patients. They are also utilized for the transfer of emergency medical and trauma patients, further taxing the availability of AeroMed helicopters to transfer patients in need of immediate open heart surgery or angioplasty. BayCare operates the only other helicopter transport service serving Hillsborough County. BayCare maintains several helicopters, only one of which is located in Hillsborough County at St. Joseph's. BayCare helicopters are not equipped with intra-aortic balloon pump capability, thereby limiting their use in transporting the more complicated cardiac patients. Helicopter transport is not only a traumatic experience for the patient, but time consuming. Once a request has been made by Brandon to transport a patient in need of urgent intervention, it routinely takes two and a half hours, with instances of up to four hours, to effectuate a helicopter transfer. At the patient's beside, AeroMed personnel must remove the patient's existing monitors, IVS, and drips, and refit the patient with AeroMed's equipment in preparation for flight. In more complicated cases requiring the use of an intra-aortic balloon pump, the patient's balloon pump placed at Brandon must be removed and substituted with the balloon pump utilized by AeroMed. Further delays may be experienced at the receiving facility. The national average of the time from presentation to commencement of the procedure is reported to be two hours. In most instances at UCH, it is probably 90 minutes although "[t]here are of course instances where it would be much faster . . .". (Tr. 3212). On the other hand, there are additional delays from time-to-time. "[P]erhaps the longest circumstance would be when all the labs are full . . . or . . . even worse . . . if all the staff has just left for the day and they are almost home, to then turn them around and bring them all back." (Id.) Specific Cases Involving Transfers Delays in the transfer process were detailed at hearing by Brandon cardiologists with regard to specific Brandon patients. In cases in which "time is muscle," delay is critical except for one subset of such cases: that in which, no matter what procedure is available and no matter how timely that procedure can be provided, the patient cannot be saved. Craig Randall Martin, M.D., Board-certified in Internal Medicine and Cardiovascular Disease, and an expert in cardiology, wrote to AHCA in support of the application by detailing two "examples of patients who were in an extreme situation that required emergent, immediate intervention . . . [intervention that could not be provided] at Brandon Hospital." (Tr. 408). One of these concerned a man in his early sixties who was a patient at Brandon the night and morning of October 13 and 14, 1998. It represents one of the rare cases in which an emergency angioplasty was performed at Brandon even though the hospital does not have open heart backup. The patient had presented to the Emergency Room at approximately 11:00 p.m., on October 13 with complaints of chest pain. Although the patient had a history of prior infarctions, PTCA procedures, and onset diabetes, was obese, a smoker and had suffered a stroke, initial evaluation, including EKG and blood tests, did not reveal an MI. The patient was observed and treated for what was probably angina. With the subsiding of the chest pain, he was appropriately admitted at 2:30 a.m. to a non- intensive cardiac telemetry bed in the hospital. At 3:00 a.m., he was observed to be stable. A few hours or so later, the patient developed severe chest pain. The telemetry unit indicated a very slow heart rate. Transferred to the intensive care unit, his blood pressure was observed to be very low. Aware of the seriousness of the patient's condition, hospital personnel called Dr. Martin. Dr. Martin arrived on the scene and determined the patient to be in cardiogenic shock, an extreme situation. In such a state, a patient has a survival rate of 15 to 20 percent, unless revascularization occurs promptly. If revascularization is timely, the survival rate doubles to 40 percent. Coincident with the cardiogenic shock, the patient was suffering a complete heart block with a number of blood clots in the right coronary artery. The patient's condition, to say the least, was grave. Dr. Martin described the action taken at Brandon: . . . I immediately called in the cardiac catheterization team and moved the patient to the catheterization laboratory. * * * Somewhere around 7:30 in the morning, I put a temporary pacemaker in, performed a diagnostic catheterization that showed that one of his arteries was completely clotted. He, even with the pacemaker giving him an adequate heart rate, and even with the use of intravenous medication for his blood pressure, . . . was still in cardiogenic shock. * * * And I placed an intra-aortic balloon pump . . ., a special pump that fits in the aorta and pumps in synchrony with the heart and supports the blood pressure and circulation of the muscle. That still did not alleviate the situation . . . an excellent indication to do a salvage angioplasty on this patient. I performed the angioplasty. It was not completely successful. The patient had a respiratory arrest. He required intubation, required to be put on a ventilator for support. And it became apparent to me that I did not have the means to save this patient at [Brandon]. I put a call to the . . . cardiac surgeon of choice . . . . [Because the surgeon was on vacation], [h]is associate [who happened to be in the operating room at UCH] called me back immediately . . . and said ["]Yes, I'll take your patient. Send him to me immediately, I will postpone my current case in order to take care of your patient.["] At that point, we called for helicopter transport, and there were great delays in obtaining [the] transport. The patient was finally transferred to University Community Hospital, had surgery, was unsuccessful and died later that afternoon. (Tr. 409-412). By great delays in the transport, Dr. Martin referred to inability to obtain prompt helicopter transport. University Community Hospital, the receiving hospital, was not able to find a helicopter. Dr. Martin, therefore, requested Tampa General (a third hospital uninvolved from the point of being either the transferring or the receiving hospital) to send one of its two helicopters to transfer the patient from Brandon to UCH. Dr. Martin described Tampa General's response: They balked. And I did not know they balked until an hour later. And I promptly called them back, got that person on the telephone, we had a heated discussion. And after that person checked with their supervisor, the helicopter was finally sent. There was at least an hour-and-a-half delay in obtaining a helicopter transport on this patient that particular morning that was unnecessary. And that is critical when you have a patient in this condition. (Tr. 413, emphasis supplied.) In the case of this patient, however, the delay in the transport from Brandon to the UCH cardiovascular surgery table, in all likelihood, was not critical to outcome. During the emergency angioplasty procedure at Brandon, some of the clot causing the infarction was dislodged. It moved so as to create a "no-flow state down the right coronary artery. In other words, . . ., it cut off[] the microcirculation . . . [so that] there is no place for the blood . . . to get out of the artery. And that's a devastating, deadly problem." (Tr. 2721). This "embolization, an unfortunate happenstance [at times] with angioplasty", id., probably sealed the patient's fate, that is, death. It is very likely that the patient with or without surgery, timely or not, would not have survived cardiogenic shock, complete heart block, and the circumstance of no circulation in the right coronary artery that occurred during the angioplasty procedure. Adithy Kumar Gandhi, M.D., is Board-certified in Internal Medicine and Cardiology. Employed by the Brandon Cardiology Group, a three-member group in Brandon, Dr. Gandhi was accepted as an expert in the field of cardiology in this proceeding. Dr. Gandhi testified about two patients in whose cases delays occurred in transferring them to St. Joseph’s. He also testified about a third case in which it took two hours to transfer the patient by helicopter to Tampa General. The first case involves an elderly woman. She had multiple-risk factors for coronary disease including a family history of cardiac disease and a personal history of “chest pain.” (Tr. 2299). The patient presented at Brandon’s Emergency Room on March 17, 1999 at around 2:30 p.m. Seen by the E.R. physician about 30 minutes later, she was placed in a monitored telemetry bed. She was determined to be stable. During the next two days, despite family and personal history pointing to a potentially serious situation, the patient refused to submit to cardiac catheterization at Brandon as recommended by Dr. Gandhi. She maintained her refusal despite results from a stress test that showed abnormal left ventricular systolic function. Finally, on March 20, after a meeting with family members and Dr. Gandhi, the patient consented to the cath procedure. The procedure was scheduled for March 22. During the procedure, it was discovered that a major artery of the heart was 80 percent blocked. This condition is known as the “widow-maker,” because the prognosis for the patient is so poor. Dr. Gandhi determined that “the patient needed open heart surgery and . . . to be transferred immediately to a tertiary hospital.” (Tr. 2305-6). He described that action he took to obtain an immediate transfer as follows: I talked to the surgeon up at St. Joseph’s and I informed him I have had difficulties transferring patients to St. Joseph’s the same day. [I asked him to] do me a favor and transfer the patient out of Brandon Hospital as soon as possible by helicopter. The surgeon promised me that he would take care of that. (Tr. 2261). The assurance, however, failed. The patient was not transferred that day. That night, while still at Brandon, complications developed for the patient. The complications demanded that an intra-aortic balloon pump be inserted in order to increase the blood flow to the heart. After Dr. Gandhi’s partner inserted the pump, he, too, contacted the surgeon at St. Joseph’s to arrange an immediate transfer for open heart surgery. But the patient was not transferred until early the next morning. Dr. Gandhi’s frustration at the delay for this critically ill patient in need of immediate open heart surgery is evident from the following testimony: So the patient had approximately 18 hours of delay of getting to the hospital with bypass capabilities even though the surgeon knew that she had a widow-maker, he had promised me that he would make those transfer arrangements, even though St. Joseph’s Hospital knew that the patient needed to be transferred, even though I was promised that the patient would be at a tertiary hospital for bypass capabilities. (Tr. 2262). Rod Randall, M.D., is a cardiologist whose practice is primarily at St. Joseph’s. He had active privileges at Brandon until 1998 when he “switched to courtesy privileges,” (Tr. 1735) at Brandon. He reviewed the medical records of the first patient about whom Dr. Gandhi testified. A review of the patient’s medical records disclosed no adverse outcome due to the patient’s transfer. To the contrary, the patient was reasonably stable at the time of transfer. Nonetheless, it would have been in the patient’s best interest to have been transferred prior to the catheterization procedure at Brandon. As Dr. Randall explained, [W]e typically cath people that we feel are going to have a probability of coronary artery disease. That is, you don’t tend to cath someone that [for whom] you don’t expect to find disease . . . . If you are going to cath this patient, [who] is in a higher risk category being an elderly female with . . . diminished injection fraction . . . why put the patient through two procedures. I would have to do a diagnostic catheterization at one center and do some type of intervention at another center. So, I would opt to transfer that patient to a tertiary care center and do the diagnostic catheterization there. (Tr. 1764, 1765). Furthermore, regardless of what procedure had been performed, the significant left main blockage that existed prior to the patient’s presentation at Brandon E.R. meant that the likely outcome would be death. The second of the patients Dr. Gandhi transferred to St. Joseph’s was a 74-year-old woman. Dr. Gandhi performed “a heart catheterization at 5:00 on Friday.” (Tr. 2267). The cath revealed a 90 percent blockage of the major artery of the heart, another widow-maker. Again, Dr. Gandhi recommended bypass surgery and contacted a surgeon at St. Joseph’s. The transfer, however, was not immediate. “Finally, at approximately 11:00 the patient went to St. Joseph’s Hospital. That night she was operated on . . . ”. (Tr. 2267). If Brandon had had open heart surgery capability, “[t]hat would have increased her chances of survival.” No competent evidence was admitted that showed the outcome, however, and as Dr. Randall pointed out, the medical records of the patient do not reveal the outcome. The patient who was transferred to Tampa General (the third of Dr. Ghandhi's patients) had presented at Brandon’s ER on February 15, 2000. Fifty-six years old and a heavy smoker with a family history of heart disease, she complained of severe chest pain. She received thrombolysis and was stabilized. She had presented with a myocardial infarction but it was complicated by congestive heart failure. After waiting three days for the myocardial infarction to subside, Dr. Gandhi performed cardiac catheterization. The patient “was surviving on only one blood vessel in the heart, the other two vessels were 100 percent blocked. She arrested on the table.” (Tr. 2271). After Dr. Gandhi revived her, he made arrangements for her transfer by helicopter. The transfer was done by helicopter for two reasons: traffic problems and because she had an intra-aortic balloon pump and there are a limited number of ambulances with intra- aortic balloon pump maintenance capability. If Brandon had had the ability to conduct open heart surgery, the patient would have had a better likelihood of successful outcome: “the surgeon would have taken the patient straight to the operating room. That patient would not have had a second arrest as she did at Tampa General.” (Tr. 2273). Marc Bloom, M.D., is a cardiothoracic surgeon. He performs open-heart surgery at UCH, where he is the chief of cardiac surgery. He reviewed the records of this 54-year-old woman. The records reflect that, in fact, upon presentation at Brandon’s E.R., the patient’s heart failure was very serious: She had an echocardiogram done that . . . showed a 20 percent ejection fraction . . . I mean when you talk severe, this would be classified as a severe cardiac compromise with this 20 percent ejection fraction. (Tr. 2712). Once stabilized, the patient should have been transferred for cardiac catheterization to a hospital with open- heart surgery instead of having cardiac cath at Brandon. It is true that delay in the transfer once arrangements were made was a problem. The greater problem for the patient, however, was in her management at Brandon. It was very likely that open heart surgery would be required in her case. She should have been transferred prior to the catheterization as soon as became known the degree to which her heart was compromised, that is, once the results of the echocardiogram were known. Adam J. Cohen, M.D., is a cardiologist with Diagnostic Consultative Cardiology, a group located in Brandon that provides cardiology services in Hillsborough County. Dr. Cohen provided evidence of five patients who presented at Brandon and whose treatments were delayed because of the need for a transfer. The first of these patients was a 76-year old male who presented to Brandon’s ER on April 6, 1999. Dr. Cohen considered him to be suffering “a complicated myocardial infarction.” (Brandon Ex. 45, p. 43) Cardiac catheterization conducted by Dr. Cohen showed “severe multi-vessel coronary disease, cardiogenic shock, severely impaired [left ventricular] function for which an intra-aortic balloon pump was placed . . .”. (Id.) During the placement of the pump, the patient stopped breathing and lost pulse. He was intubated and stabilized. A helicopter transfer was requested. There was only one helicopter equipped to conduct the transfer. Unfortunately, “the same day . . . there was a mass casualty event within the City of Tampa when the Gannet Power Plant blew up . . .”. (Brandon Ex. 45, p. 44). An appropriate helicopter could not be secured. Dr. Cohen did not learn of the unavailability of helicopter transport for an hour after the request was made. Eventually, the patient was transferred by ambulance to UCH. There, he received angioplasty and “stenting of the right coronary artery times two.” (Id., at p. 47.) After a slow recovery, he was discharged on April 19. In light of the patient’s complex cardiac condition, he received a good outcome. This patient is an example of another patient who should have been transferred sooner from Brandon since Brandon does not have open heart surgery capability. The second of Dr. Cohen’s patients presented at Brandon’s E.R. at 10:30 p.m. on June 14, 1999. He was 64 years old with no risk factors for coronary disease other than high blood pressure. He was evaluated and diagnosed with “a large and acute myocardial infarction” Two hours later, the therapy was considered a failure because there was no evidence that the area of the heart that was blocked had been reperfused. Dr. Cohen recommended transfer to UCH for a salvage angioplasty. The call for a helicopter was made at 12:58 a.m. (early the morning of June 15) and the helicopter arrived 40 minutes later. At UCH, the patient received angioplasty procedure and stenting of two coronary arteries. He suffered “[m]oderately impaired heart function, which is reflective of myocardial damage.” (Brandon Ex. 45, p. 58). If salvage angioplasty with open heart backup had been available at Brandon, the patient would have received it much more quickly and timely. Whether the damage done to the patient’s heart during the episode could have been avoided by prompt angioplasty at Brandon is something Dr. Cohen did not know. As he put it, “I will never know, nor will anyone else know.” (Brandon Ex. 45, p. 60). The patient later developed cardiogenic shock and repeated ventricular tachycardia, requiring numerous medical interventions. Because of the interventions and mechanical trauma, he required surgery for repair of his right femoral artery. The patient recently showed an injection fraction of 45 percent below the minimum for normal of 50 percent. The third patient was a 51-year-old male who had undergone bypass surgery 19 years earlier. After persistent recurrent anginal symptoms with shortness of breath and diaphoresis, he presented at Brandon’s E.R. at 1:00 p.m. complaining of heavy chest pain. Thrombolytic therapy was commenced. Dr. Cohen described what followed: [H]he had an episode of heart block, ventricular fibrillation, losing consciousness, for which he received ACLS efforts, being defibrillated, shocked, times three, numerous medications, to convert him to sinus rhythm. He was placed on IV anti- arrhythmics consisting of amiodarone. The repeat EKG showed a worsening of progression of his EKG changes one hour after the initiation of the TPA. Based on that information, his clinical scenario and his previous history, I advised him to be transferred to University Hospital for a salvage angioplasty. (Brandon Ex. 45, p. 62). Transfer was requested at 1:55 p.m. The patient departed Brandon by helicopter at 2:20 p.m. The patient received the angioplasty at UCH. Asked how the patient would have benefited from angioplasty at Brandon without having to have been transferred, Dr. Cohen answered: In a more timely fashion, he would have received an angioplasty to the culprit lesion involved. There would have been much less occlusive time of that artery and thereby, by inference, there would have been greater salvage of myocardium that had been at risk. (Brandon Ex. 45, p. 65). The patient, having had bypass surgery in his early thirties, had a reduced life expectancy and impaired heart function before his presentation at Brandon in June of 1999. The time taken for the transfer of the patient to UCH was not inordinate. The transfer was accomplished with relative and expected dispatch. Nonetheless, the delay between realization at Brandon of the need for a salvage angioplasty and actual receipt of the procedure after a transfer to UCH increased the potential for lost myocardium. The lack of open heart services at Brandon resulted in reduced life expectancy for a patient whose life expectancy already had been diminished by the early onset of heart disease. The fourth patient of Dr. Cohen’s presented to Brandon’s E.R. at 8:30, the morning of August 29, 1999. A fifty-four-year-old male, he had been having chest pain for a month and had ignored it. An EKG showed a complete heart block with atrial fibrillation and change consistent with acute myocardial infarction. Thrombolytic therapy was administered. He continued to have symptoms including increased episodes of ventricular arrhythmias. He required dopamine for blood pressure support due to his clinical instability and the lack of effectiveness of the thrombolytics. The patient refused a transfer and catheterization at first. Ultimately, he was convinced to undergo an angioplasty. The patient was transferred by helicopter to UCH. The patient was having a “giant ventricular infarct . . . a very difficult situation to take care of . . . and the majority of [such] patients succumb to [the] disease . . .”. (Tr. 2703). The cardiologist was unable to open the blockage via angioplasty. Dr. Bloom was called in but the patient refused surgical intervention. After interaction with his family the patient consented. Dr. Bloom conducted open heart surgery. The patient had a difficult post-operative course with arrythmias because “[h]e had so much dead heart in his right ventricle . . .”. (Id.) The patient received an excellent outcome in that he was seen in Dr. Bloom’s office with 40 percent injection fraction. Dr. Bloom “was just amazed to see him back in the office . . . and amazed that this man is alive.” (Tr. 2704). Most of the delay in receiving treatment was due to the patient’s reluctance to undergo angioplasty and then open heart surgery. The fifth patient of Dr. Cohen’s presented at Brandon’s E.R. on March 22, 2000. He was 44 years old with no prior cardiac history but with numerous risk factors. He had a sudden onset of chest discomfort. Lab values showed an elevation consistent with myocardial injury. He also had an abnormal EKG. Dr. Cohen performed a cardiac cath on March 23, 2000. The procedure showed a totally occluded left anterior descending artery, one of the three major arteries serving the heart. Had open heart capability been available at Brandon, he would have undergone angioplasty and stenting immediately. As it was, the patient had to be transferred to UCH. A transfer was requested at 10:25 that morning and the patient left Brandon’s cath lab at 11:53. Daniel D. Lorch, M.D., is a specialist in pulmonary medicine who was accepted as an expert in internal medicine, pulmonary medicine and critical care medicine, consistent with his practice in a “five-man pulmonary internal medicine critical care group.” (Brandon Ex. 42, p. 4). Dr. Lorch produced medical records for one patient that he testified about during his deposition. The patient had presented to Brandon’s E.R. with an MI. He was transferred to UCH by helicopter for care. Dr. Lorch supports Brandon’s application. As he put it during his deposition: [Brandon] is an extremely busy community hospital and we are in a very rapidly growing area. The hospital is quite busy and we have a large number of cardiac patients here and it is not infrequently that a situation comes up where there are acute cardiac events that need to be transferred out. (Brandon Ex. 42, p. 20). Transfers Following Diagnostic Cardiac Catheterization Brandon transfers a high number cardiac patients for the provision of angioplasty or open heart surgery in addition to those transferred under emergency conditions. In 1996, Brandon performed 828 diagnostic cardiac catheterization procedures. Of this number, 170 patients were transferred to existing providers for open heart surgery and 170 patients for angioplasty. In 1997, Brandon performed 863 diagnostic catheterizations of which 180 were transferred for open heart surgery and 159 for angioplasty. During 1998, 165 patients were transferred for open heart surgery and 161 for angioplasty out of 816 diagnostic catheterization procedures. For the first nine months of 1999, Brandon performed 639 diagnostic catheterizations of which 102 were transferred to existing providers for open heart surgery and 112 for angioplasty. A significant number of patients are transferred from Brandon for open heart surgery services. These transfers are consistent with the norm in Florida. After all, open heart surgery is a tertiary service. Patients are routinely transferred from most Florida hospitals to tertiary hospitals for OHS and PCTA. The large majority of Florida hospitals do not have OHS programs; yet, these hospitals receive patients who need OHS or PTCA. Transfers, although the norm, are not without consequence for some patients who are candidates for OHS or PCTA. If Brandon had open heart and angioplasty capability, many of the 1220 patients determined to be in need of angioplasty or open heart surgery following a diagnostic catheterization procedure at Brandon could have received these procedures at Brandon, thereby avoiding the inevitable delay and stress occasioned by transfer. Moreover, diagnostic catheterizations and angioplasties are often performed sequentially. Therefore, Brandon patients determined to be in need of angioplasty following a diagnostic catheterization would have had access to immediate angioplasty during the same procedure thus reducing the likelihood of a less than optimal outcome as the result of an additional delay for transfer. Adverse Impact on Existing Providers Competition There is active competition and available patient choices now in Brandon's PSA. As described, there are many OHS programs currently accessible to and substantially serving Brandon's PSA. There is substantial competition now among OHS providers so as to provide choices to PSA residents. There are no financial benefits or cost savings accruing to the patient population if Brandon is approved. Brandon does not propose lower charges than the existing OHS providers. Balanced Budget Act The Balanced Budget Act of 1997 has had a profound negative financial impact on hospitals throughout the country. The Act resulted in a significant reduction in the amount of Medicare payments made to hospitals for services rendered to Medicare recipients. During the first five years of the Act's implementation, Florida hospitals will experience a $3.6 billion reduction in Medicare revenues. Lakeland will receive $17 million less, St.Joseph's will receive $44 million less, and Tampa General will receive $53 million less. The impact of the Act has placed most hospitals in vulnerable financial positions. It has seriously affected the bottom line of all hospitals. Large urban teaching hospitals, such as TGH, have felt the greatest negative impact, due to the Act's impact on disproportionate share reimbursement and graduate medical education payment. The Act's impact upon Petitioners render them materially more vulnerable to the loss of OHS/PTCA revenues to Brandon than they would have been in the absence of the Act. Adverse Impact on Tampa General Tampa General is the "safety net provider" for Hillsborough County. Tampa General is a Medicaid disproportionate share provider. In fiscal year 1999, the hospital provided $58 million in charity care, as that term is defined by AHCA. Tampa General plays a unique, essential role in Hillsborough County and throughout West Central Florida in terms of provision of health care. Its regional role is of particular importance with respect to Level I trauma services, provision of burn care, specialized Level III neonatal and perinatal intensive care services, and adult organ transplant services. These services are not available elsewhere in western or central Florida. In fiscal year 1999, Tampa General experienced a net loss of $12.6 million in providing the services referenced above. It is obligated under contract with the State of Florida to continue to provide those services. Tampa General is a statutory teaching hospital. In fiscal year 1999, it provided unfunded graduate medical education in the amount of $19 million. Since 1998, Tampa General has consistently experienced losses resulting from its operations, as follows: FY 1998-$29 million, FY 1999-$27 million; FY 2000 (5 months)-$10 million. The hospital’s financial condition is not the result of material mismanagement. Rather, its financial condition is a function of its substantial provision of charity and Medicaid services, the impact of the Act, reduced managed care revenues, and significant increases in expense. Tampa General’s essential role in the community and its distressed financial condition have not gone unnoticed. The Greater Tampa Chamber of Commerce established in February of 2000 an Emergency Task Force to assess the hospital's role in the community, and the need for supplemental funding to enable it to maintain its financial viability. Tampa General requires supplemental funding on a continuing basis in order to begin to restore it to a position of financial stability, while continuing to provide essential community services, indigent care, and graduate medical education. It will require ongoing supplemental funding of $20- 25 million annually to avoid triggering the default provision under its bond covenants. As of the close of hearing, the 2000 session of the Florida Legislature had adjourned. The Legislature appropriated approximately $22.9 million for Tampa General. It is, of course, uncertain as to what funding, if any, the Legislature will appropriate to the hospital in future years, as the terms which constitute the appropriations must be revisited by the Legislature on an annual basis. Tampa General has prepared internal financial projections for its fiscal years 2000-2002. It projects annual operating losses, as follows: FY 2000-$20.1 million; FY 2001- $20.6 million; FY 2002-$31.9 million. While its projections anticipate certain "strategic initiatives" that will enhance its financial condition, including continued supplemental legislative funding, the success and/or availability of those initiatives are not "guaranteed" to be successful. If the Brandon program is approved, Tampa General will lose 93 OHS cases and 107 angioplasty cases during Brandon's second year of operation. That loss of cases will result in a $1.4 million annual reduction in TGH's net income, a material adverse impact given Tampa General’s financial condition. OHS services provide a positive contribution to Tampa General's financial operations. Those services constitute a core piece of Tampa General's business. The anticipated loss of income resulting from Brandon's program pose a threat to the hospital’s ability to provide essential community services. Adverse Impact on UCH UCH operated at a financial break-even in its fiscal year 1999. In the first five months of its fiscal year 2000, the hospital has experienced a small loss. This financial distress is primarily attributed to less Medicare reimbursement due to the Act and less reimbursement from managed care. UCH's reimbursement for OHS services provides a good example of the financial challenges facing hospitals. In 1999, UCH's net income per OHS case was reduced 33 percent from 1998. Also in 1999, UCH received OHS reimbursement of only 32 percent of its charges. UCH would be substantially and adversely impacted by approval of Brandon's proposal. As described, UCH currently is a substantial provider of OHS and angioplasty services to residents of Brandon's PSA. There are many cardiologists on staff at Brandon who also actively practice at UCH. UCH is very accessible from Brandon's PSA. UCH reasonably projects to lose the following volumes in the first three years of operation of the proposed program: a loss of 78-93 OHS procedures, a loss of 24-39 balloon angioplasties, and a loss of 97-115 stent angioplasties. Converting this volume loss to financial terms, UCH will suffer the following financial losses as a direct and immediate result of Brandon being approved: about $1.1 million in the first year, and about $1.2 million in the second year, and about $1.3 million in the third year. As stated, UCH is currently operating at about a financial break-even point. The impact of the Balanced Budget Act, reduced managed care reimbursement, and UCH's commitment to serve all patients regardless of ability to pay has a profound negative financial impact on UCH. A recurring loss of more than $1 million dollars per year due to Brandon's new program will cause substantial and adverse impact on UCH. Adverse Impact on St. Joseph’s If Brandon's application is approved, St. Joseph’s will lose 47 OHS cases and 105 PTCA cases during Brandon's second year. That loss of cases will result in a $732,000 annual reduction in SJH's net income. That loss represents a material impact to SJH. Between 1997 and 2000, St. Joseph’s has experienced a pattern of significant deterioration in its financial performance. Its net revenue per adjusted admission had been reduced by 12 percent, while its costs have increased significantly. St. Joseph's net income from operations has deteriorated as follows: FYE 6/30/97-$31 million; FYE 12/31/98- $24 million; FYE 12/31/99-$13.8 million. A net operating income of $13.8 million is not much money relative to St Joseph's size, the age of its physical plant, and its need for capital to maintain and improve its facilities in order to remain competitive. St. Joseph’s offers a number of health care services to the community for which it does not receive reimbursement. Unreimbursed services include providing hospital admissions and services to patients of a free clinic staffed by volunteer members of SJH's medical staff, free immunization programs to low-income children, and a parish nurse program, among others. St. Joseph’s evaluates such programs annually to determine whether it has the financial resources to continue to offer them. During the past two years, the hospital has been forced to eliminate two of its free community programs, due to its deteriorating financial condition. St. Joseph’s anticipates that it will have to eliminate additional unreimbursed community services if it experiences an annual reduction in net income of $730,000. Adverse Impact to LRMC The approval of Brandon will have an impact on Lakeland. Lakeland will suffer a financial loss of about $253,000 annually. This projection is based on calculated contribution margins of OHS and PTCA/stent procedures performed at the hospital. A loss of $253,000 per year is a material loss at Lakeland, particularly in light of its slim operating margin and the very substantial losses it has experienced and will continue to experience as a result of the Balanced Budget Act of 1997. In addition to the projected loss of OHS and other procedures based upon Brandon's application, Lakeland may experience additional lost cases from areas such as Bartow and Mulberry from which it draws patients to its open heart/cardiology program. Lakeland will also suffer material adverse impacts to its OHS program due to the negative effect of Brandon's program on its ability to recruit and retain nurses and other highly skilled employees needed to staff its program. The approval of Brandon will also result in higher costs at existing providers such as Lakeland as they seek to compete for a limited pool of experienced people by responding to sign-on bonuses and by reliance on extensive temporary nursing agencies and pools. Nursing Staff/Recruitment The staffing patterns and salaries for Brandon's projected 40.1 full-time equivalent employees to staff its open heart surgery program are reasonable and appropriate. Filling the positions will not be without some difficulty. There is a shortage for skilled nursing and other personnel needed for OHS programs nationally, in Florida and in District 6. The shortage has been felt in Hillsborough County. For example, it has become increasingly difficult to fill vacancies that occur in critical nursing positions in the coronary intensive care unit and in telemetry units at Tampa General. Tampa General's expenses for nursing positions have "increased tremendously." (Tr. 2622). To keep its program going, the hospital has hired "travelers . . . short-term employment, registered nurses that come from different agencies, . . . with [the hospital] a minimum of 12 weeks." (Tr. 2622). In fact, all hospitals in the Tampa Bay area utilize pool staff and contract staff to fill vacancies that appear from time-to- time. Use of contract staff has not diminished quality of care at the hospitals, although "they would not be assigned to the sickest patients." (Tr. 2176). Another technique for dealing with the shortage is to have existing full-time staff work overtime at overtime pay rates. St. Joseph's and Lakeland have done so. As a result, they have substantially exceeded their budgeted salary expenses in recent months. It will be difficult for Brandon to hire surgical RNs, other open heart surgery personnel and critical care nurses necessary to staff its OHS program. The difficulty, however, is not insurmountable. To meet the difficulty, Brandon will move members of its present staff with cardiac and open heart experience into its open heart program. It will also train some existing personnel in conjunction with the staff and personnel at Bayonet Point. In addition to drawing on the existing pool of nurses, Brandon can utilize HCA's internal nationwide staffing data base to transfer staff from other HCA facilities to staff Brandon's open heart program. Approximately 18 percent of the nurses hired at Brandon already come from other HCA facilities. The nursing shortage has been in existence for about a decade. During this time, other open heart programs have come on line and have been able to staff the programs adequately. Lakeland, in District 6, has demonstrated its ability to recruit and train open heart surgery personnel. Brandon, itself, has been successful, despite the on- going shortage, in appropriately staffing its recent additions of tertiary level NICU beds, an expanded Emergency Room, labor and delivery and recovery suites, and new high-risk, ante-partum observation unit. Brandon has begun to offer sign-on bonuses to compete for experienced nurses. Several employees who staff the Lakeland, UCH and Tampa General programs live in Brandon. These bonuses are temptations for them to leave the programs for Brandon. Other highly skilled, experienced individuals who already work at existing programs may be lost to Brandon's program as well simply as the natural result of the addition of a new program. In the end, Brandon will be able to staff its program, but it will make it more difficult for all of the programs in Hillsborough County and for Lakeland to meet their staffing needs as well as producing a financial impact on existing providers. Financial Feasibility Short-Term Brandon needs $4.2 million to fund implementation of the program. Its parent corporation, HCA will provide financing of up to $4.5 million for implementation. The $4.2 million in start-up costs projected by Brandon does not include the cost of a second cath lab or the costs to upgrade the equipment in the existing cath lab. Itemization of the funds necessary for improvement of the existing cath lab and the addition of the second cath lab were not included in Brandon's pro formas. It is the Agency's position that addition of a cath lab (and by inference, upgrade to an existing lab) requires only a letter of exemption as projects separate from an open heart surgery program even when proposed in support of the program. (See UCH No. 7, p. 83). The position is not inconsistent with cardiac catheterization programs as subject to requirements in law separate from those to which an open heart surgery program is subject. Brandon, through HCA, has the ability to fund the start-up costs of the project. It is financially feasible in the short-term. Long-Term Open heart surgery programs (inclusive of angioplasty and stent procedures, as well as other open heart surgery procedures) generally are very profitable. They are among the most profitable of programs conducted by hospitals. Brandon's projected charges for open heart, angioplasty, and stent procedures are based on the average charges to patients residing in Brandon's PSA inflated at 2 percent per year. The inflation rate is consistent with HCFA's August 1, 2000, Rule implementing a 2.3 percent Medicare reimbursement increase. Brandon's projected payor mix is reasonably based on the existing open heart, angioplasty, and stent patients within its PSA. Brandon also estimated conservatively that it would collect only 45 to 50 percent of its charges from third-party payors. To determine expenses, Brandon utilized Bayonet Point's accounting system. It provided a level of detail that could not be obtained otherwise. "For patients within Brandon's primary service area, . . . that information is not provided by existing providers in the area that's available for any public consumption." (Tr. 1002). While perhaps the most detailed data available, Bayonet Point data was far from an ideal model for Brandon. Bayonet Point performs about 1,500 OHS cases per year. It achieves economies of scale that will not be achievable at Brandon in the foreseeable future. There is a relationship between volume and cost efficiency. The higher the volume, the greater the cost efficiency. Brandon's volume is projected to be much lower than Bayonet Point's. To make up for the imperfection of use of Bayonet Point as an "expenses" proxy, Brandon's financial expert in opining that the project was feasible in the long-term, considered two factors with regard to expenses. First, it included its projected $1.8 million in salary expenses as a separate line item over and above the salary expenses contained in the Bayonet Point data. (This amounted to a "double" counting of salary expenses.) Second, it recognized HCA's ability to obtain competitive pricing with respect to equipment and services for its affiliated hospitals, Brandon being one of them. Brandon projected utilization of 249 and 279 cases in its second and third year of operations. These projections are reasonable. (See the testimony of Mr. Balsano on rebuttal and Brandon Ex. 74). Comparison of Agency Action in CONs 9169 and 9239 Brandon's application in this case, CON 9239, was filed within a six-month period of the filing of an earlier application, CON 9169. The Agency found the two applications to be similar. Indeed, the facts and circumstances at issue in the two applications other than the updating of the financial and volume numbers are similar. So is the argument made in favor of the applications. Yet, the first application was denied by the Agency while the second received preliminary approval. The difference in the Agency's action taken on the later application (the one with which this case is concerned), i.e., approval, versus the action taken on the earlier, denial, was explained by Scott Hopes, the Chief of the Bureau of Certificate of Need at the time the later application was considered: The [later] Brandon application . . ., which is what we're addressing here today, included more substantial information from providers, both cardiologists, internists, family practitioners and surgeons with specific case examples by patient age [and] other demographics, the diagnoses, outcomes, how delays impacted outcomes, what permanent impact those adverse outcomes left the patient in, where earlier . . . there weren't as many specifics. (Tr. 1536, 1537). A comparison of the application in CON 9169 and the record in this case bears out Mr. Hopes' assessment that there is a significant difference between the two applications. Comparison of the Agency Action with the District 9 Application During the same batching cycle in which CON 9239 was considered, five open heart surgery applications were considered from health care providers in District 9. Unlike Brandon's application, these were all denied. In the District 9 SAAR, the Agency found that transfers are an inherent part of OHS as a tertiary service. The Agency concluded that, "[O]pen heart surgery is a tertiary service and patients are routinely transferred between hospitals for this procedure." (UCH Ex. 7, pp. 51-54). In particular, the Agency recognized Boca Raton's claim that it had provided "extensive discussion of the quality implications of attempting to deal with cardiac emergencies through transfer to other facilities." (UCH Ex. 7, p. 52). Unlike the specific information referred to by Mr. Hopes in his testimony quoted, above, however, the foundation for Boca Raton's argument is a 1999 study published in the periodical Circulation, entitled "Relationship Between Delay in Performing Direct Coronary Angioplasty and Early Clinical Outcomes." (UCH Ex. 7, p. 21). This publication was cited by the Agency in its SAAR on the application in this case. Nonetheless, a fundamental difference remains between this case and the District 9 applications, including Boca Raton's. The application in this case is distinguished by the specific information to which Mr. Hopes alluded in his testimony, quoted above.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered granting the application of Galencare, Inc., d/b/a Brandon Regional Hospital for open heart surgery, CON 9239. DONE AND ENTERED this 30th day of March, 2001, in Tallahassee, Leon County, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 2001. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Stephen A. Ecenia, Esquire R. David Prescott, Esquire Thomas W. Konrad, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 North Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 James C. Hauser, Esquire Metz, Hauser & Husband, P.A. 215 South Monroe Street, Suite 505 Post Office Box 10909 Tallahassee, Florida 32302 John H. Parker, Jr., Esquire Jonathan L. Rue, Esquire Sarah E. Evans, Esquire Parker, Hudson, Rainer & Dobbs 1500 Marquis Two Tower 285 Peachtree Center Avenue, Northeast Atlanta, Georgia 30303 Robert A. Weiss, Esquire Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200 118 North Monroe Street Tallahassee, Florida 32301
The Issue Whether the adult open heart surgery rule in effect at the time the certificate of need (CON) applications were filed, and until January 24, 2002, or the rule as amended on that date is applicable to this case. Which, if any, of the applications filed by Martin Memorial Medical Center, Inc. (Martin Memorial); Bethesda Healthcare System, Inc., d/b/a Bethesda Memorial Hospital (Bethesda); and Boca Raton Community Hospital, Inc. (BRCH) meet the requirements for a CON to establish an adult open heart surgery program in Agency for Health Care Administration (AHCA) Health Planning District 9, for Okeechobee, Indian River, St. Lucie, Martin, and Palm Beach Counties, Florida.
Findings Of Fact The Agency for Health Care Administration (AHCA) is the agency which administers the certificate of need (CON) program for health care facilities and programs in Florida. It is also the designated state health planning agency. See Subsection 408.034(1), Florida Statutes. For health planning purposes, AHCA District 9 includes Indian River, Okeechobee, St. Lucie, Martin, and Palm Beach Counties. See Subsection 408.032(5), Florida Statutes. AHCA published a fixed need pool of zero for additional open heart surgery programs in District 9, for the January 2002, planning horizon. The mathematical need formula in the rule, using the use rate for open heart surgery procedures in the district as applied to the projected population growth, indicated a gross numeric need for 7.9 programs in District 9. After rounding off the decimal and subtracting four, for the number of existing District 9 open heart surgery programs, the formula showed a numerical need for four additional ones. The need number defaulted to zero, however, because one of the existing programs, at Lawnwood Medical Center, Inc., d/b/a Lawnwood Regional Medical Center (Lawnwood), had not reached the required minimum of 350 surgeries a year, or 29 cases a month for 12 months prior to the quarter in which need was published. Having initiated services in March 1999, the Lawnwood program had not been operational for 12 months at the time the applications were filed in October 1999. The other existing providers of adult open heart services in District 9, in addition to Lawnwood, are Palm Beach Gardens Community Hospital, Inc., d/b/a Palm Beach Gardens Medical Center (PBGMC); Columbia/JFK Medical Center Limited Partnership, d/b/a JFK Medical Center (JFK); and Tenet Healthsystem Hospitals, Inc., d/b/a Delray Medical Center (Delray). All are intervening parties to this proceeding. In the Pre-Hearing Stipulation, the parties agreed that the Intervenors have standing to participate in this proceeding. Despite the publication of zero numeric need, five hospitals in District 9 applied for CONs to establish new adult open heart programs asserting need based on not normal circumstances. Three of those applications are at issue in this case: CON Number 9249 filed by Martin Memorial Medical Center, Inc. (Martin Memorial); CON Number 9250 by Bethesda Healthcare System, Inc., d/b/a Bethesda Memorial Hospital (Bethesda); and CON Number 9248 by Boca Raton Community Hospital, Inc. (BRCH). AHCA initially reviewed and denied all of the applications. After changing its position before the final hearing, AHCA supports the approval of the applications filed by Martin Memorial and BRCH. Martin Memorial Martin Memorial, the only hospital in Martin County, and the only party/applicant not located in Palm Beach County, operates two facilities, a total of 336 beds, on two separate campuses under a single license. The larger hospital, in Stuart, has 236 beds and is located approximately 20 miles south of Lawnwood and 30 miles north of PBGMC. Martin Memorial owns and maintains, at the hospital, its own ambulance service used exclusively for hospital-to-hospital transfers. The drive from Martin Memorial to Lawnwood averages 38 minutes. The drive time to PBGMC averages 48 minutes. By helicopter, it takes 11 or 12 minutes to get from Martin Memorial to PBGMC. The remaining 100 Martin Memorial Hospital beds are located on its southern campus, approximately six miles south of the Stuart facility. Martin Memorial is a private not-for-profit hospital, established in 1939. The parent corporation also operates an ambulatory care center, physician group, billing and collection company, and a foundation. Martin Memorial is applying to operate an open heart program at its Stuart location, where it currently offers cardiology, hematology, nephrology, pulmonary, infectious disease, pathology, blood bank, anesthesiology, diagnostic nuclear medicine, and intensive care services. Martin Memorial has a 25-bed telemetry unit, a 14-bed medical intensive care unit, a nine-bed surgical intensive care unit, and a 22-bed progressive care unit, with an identically equipped 16-bed overflow unit used only for high seasonal occupancy, from approximately December to April. If its CON is approved, Martin Memorial will dedicate four surgical intensive care unit beds and six progressive care beds for post-open heart surgery patients. Martin Memorial agreed to condition its CON on the provision of 2.4% of the project's gross revenues for charity care and 2% for Medicaid. The total estimated project cost is $6.5 million. Martin Memorial intends to affiliate with the University of Florida and its teaching facility, Shands Hospital, to assist in establishing the program and training staff. The cardiovascular surgeon is expected to be a full-time faculty member who will live and work in Martin County. Although initially opposed, AHCA now supports Martin Memorial’s application primarily because (1) it has the largest cardiac catheterization (cath) program at any hospital in this state which does not also provide open heart services; (2) it has a medium size and growing Medicare population, which constitutes the age group most likely to require open heart surgery and related services; (3) Martin County residents now must receive open heart and related services at hospitals outside Martin County, primarily in areas ranging from Palm Beach County south to Dade County; (4) emergency heart attack patients who present at Martin Memorial-Stuart could receive primary angioplasties without transfer; and (5) it is a not-for-profit hospital, while all of the existing open heart providers in the District are for- profit corporate subsidiaries. Of the applicants, Martin Memorial is also located the greatest distance from the existing providers. Bethesda Memorial Bethesda has 362 licensed beds located in Boynton Beach. JFK is nine miles north or an average drive of 18 minutes from Bethesda. Delray is nine miles south or an average drive of 17 minutes from Bethesda. Established in February 1959, Bethesda is a not-for- profit subsidiary of Bethesda Health Care Systems, Inc., which also operates some for-profit subsidiaries, including Bethesda Medical/Surgical Specialists, Bethesda Management Services, and Bethesda Comprehensive Cancer Institute. Bethesda is a disproportionate share provider of Medicaid and Medicare services. The services currently available at Bethesda include obstetrics, Level II and III neonatal intensive care, cardiology, orthopedics, pediatrics, neurological and stroke care, peripheral vascular surgery, wound care, pulmonary and infectious disease care. Bethesda recently eliminated a 20-bed unit for adult psychiatric services, and a 20-bed skilled nursing unit. Currently, at Bethesda, the sickest patients are placed in a 10-bed critical care unit. The hospital also operates a 12- bed surgical intensive care unit, an eight-bed medical intensive care unit, and 30 and 25-bed telemetry units. Bethesda was planning to open a 20-bed extension to the telemetry unit, all in private rooms, in January 2002. If an open heart surgery program is established, Bethesda, will add an eight-bed cardiovascular intensive care unit to care post-operatively for the patients. Bethesda offered to condition its CON on the provision of 3% of total open heart surgeries to Medicaid and 3% of total open heart surgeries to indigent patients. Bethesda's estimated total project cost is $4 million, $1.7 million for equipment, and $2.24 for construction. Bethesda will receive assistance from Orlando Regional Medical Center in training personnel and developing protocols for an open heart program. At Orlando Regional, a statutory teaching hospital, the number of open heart cases ranges from 1,300 to 1,600 a year. Bethesda has a contract with a physicians' group to provide a board-certified cardiovascular surgeon to serve as medical director for the open heart program. AHCA’s position is that the Bethesda application is "approvable" but, of the Palm Beach County applicants, less desirable than that of BRCH. By contrast, Bethesda's experts emphasized (1) the absence of any overlap with the Lawnwood market; (2) the greater need for a new program, based on the volume of cases, in Palm Beach County than elsewhere in the District; (3) the size, growth, and age of the population within Bethesda's market area, and (4) the ability of Bethesda to enhance access for underserved groups, particularly Medicaid patients. Boca Raton Community Hospital BRCH is licensed for 394 beds. Located in southern Palm Beach County, close to the Broward County line, BRCH is from eight to nine miles south of Delray and approximately 15 miles north of North Ridge Medical Center (North Ridge), in adjacent Broward County. On average, the drive from BRCH to Delray takes 20 minutes. The drive from BRCH to North Ridge takes about 25 minutes. Founded in the late 1960's, BRCH operates as a not-for- profit corporation. BRCH has a staff of 750 physicians and 1,600 employees. Services at BRCH include cardiology, a 10-bed Level II neonatal intensive care unit, hematology, nephrology, pulmonology, radiology, nuclear medicine, and neurology. If approved and issued a CON for adult open heart surgery, BRCH will build a new facility for the program, including two new cath labs, an electrophysiology lab and 12 intensive care beds. In the CON, the estimated construction cost was $16.5 million and the estimated equipment cost was $2.7 million of the $20 million estimated for the total project. BRCH agreed to having conditions on its CON (1) to provide 5% of open heart cases in year two to uninsured patients, (2) to establish an outreach program to increase the utilization of open heart services among the uninsured, and (3) to relinquish the CON if it fails to perform at least 350 open heart surgery procedures a year in any two consecutive years after the end of the second year of operations. AHCA determined that it should change its initial position opposing the approval of the BRCH application to one of approval because of (1) the large Medicare population in the service area; (2) the volume of emergency room heart attack patients; (3) the district out-migration for services primarily to North Ridge; (4) the large, well-developed interventional cardiology program; and (5) the not-for-profit organizational structure. When AHCA decided to support the approval of the BRCH application, it did so, in part, based on erroneous data. The cath lab volume was assumed to be approximately 1,800 caths a year, as compared to the actual volume of 667 caths for the year ending March 2001. Having considered the corrected data, AHCA’s expert described BRCH’s application as significantly less compelling, but still preferable to that of Bethesda. BRCH is the largest hospital in number of beds in Florida which does not have an open heart surgery program. AHCA also responded favorably to identified "cultural" access issues, described as underservice to demographic groups, based on race, gender, and class. BRCH presented a plan to equip a mobile unit to provide diagnostic screenings and primary care in underserved areas. Pre-Hearing Stipulations The parties stipulated that all of the applications met the statutory requirements concerning the application content and filing procedures of Sections 408.037 and 408.039, Florida Statutes (1999), and Rule 59C-1.033, Florida Administrative Code. Martin Memorial, Bethesda, and BRCH have a history of providing quality care. See Subsection 408.035(1)(c), Florida Statutes (1999). There are no existing outpatient, ambulatory or home care services which can be used as alternatives to inpatient adult open heart and angioplasty services. See Subsection 408.035(1)(d), Florida Statutes (1999). Martin Memorial and Bethesda have sufficient available funds for capital and operating expenses required for their proposed open heart surgery programs. See Subsection 408.035(1)(h), Florida Statutes (1999). Martin Memorial complied with the requirements related to costs and methods of construction, and equipment for the proposed project. Except for the contention that it omitted $1,687,180 in fixed equipment costs and that the proposed construction project is excessively large and expensive, the parties stipulated that BRCH reasonably estimated construction and equipment costs, including costs and methods of energy provision. See Subsection 408.035(1)(m), Florida Statutes (1999). The parties agreed that Subsections 408.035(1)(p), and 408.035(2)(e), Florida Statutes, related to nursing home beds, are not at issue at in this proceeding. If Bethesda, BRCH, and Martin Memorial can recruit the necessary, competent nursing and surgical staff, they will meet the requirements of Rule 59C-1.033(3), (4)(b), (4)(c), and (5)(c), Florida Administrative Code. Adult open heart surgery services are currently available to District 9 residents within the two-hour travel standard of Rule 59C-1.033(4)(a), Florida Administrative Code. Bethesda, BRCH, and Martin Memorial are accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), assuring quality as required by Rule 59C-1.033(5)(a), Florida Administrative Code. The parties agreed that if Bethesda, BRCH, and Martin Memorial can recruit the necessary nursing and surgical personnel, their programs would meet the requirements of Rule 59C-1.033(4)(b), (4)(c), (5)(b), and (5)(c), Florida Administrative Code, except that JFK and Lawnwood did not agree that the applicants satisfied the requirements related to cardiovascular surgeons. Martin Memorial will be able to obtain perfusionist services, as required by Rule 59C-1.033(5)(b)5, Florida Administrative Code. Bethesda and BRCH projected reasonable staffing patterns, in their CON schedules 6A, given projected census levels, although the ability to recruit staff and adequacy of projected salaries are at issue. The rule criteria related to pediatric open heart surgery are not applicable to this proceeding. Disputed Statutory and Rule Criteria The following statutory criteria and applicable in this case: Subsections 408.035(1)(a), (b), (c) - for comparison; (e), (f), (g), (h) - related to funding for BRCH, and related to staff recruitment and salaries; (i), (j), (k), (l), (m) - for Bethesda, and related to the size, scope, and fixed equipment cost for BRCH, (n), and (o); and Subsections 408.035(2)(a), (b), (c), and (d), Florida Statutes. The criteria in Rules 59C-1.030, and of Rule 59C-1.033(5)(b) - related to staffing, except as stipulated - are at issue. The parties have also raised the issue of whether AHCA is consistent in applying its agency rules related to open heart cases. The District 9 health plan contains two preferences for open heart applicant hospitals, the first for hospitals with established cardiac cath programs, the second for applicants with a documented commitment to serve patients regardless of their ability to pay or county of residence. All of the applicants have established diagnostic cardiac cath programs and related cardiology services. During the cardiac cath procedure, a catheter is inserted into a cardiac chamber to diagnose heart disease. During a therapeutic cardiac cath procedure, or angioplasty, the catheter with a balloon-tip is inserted into a coronary artery and inflated to open blockages. The latter requires open heart surgery back-up in case a vessel is ruptured and thus, an open heart surgery certificate of need. Martin Memorial operates the largest cardiac cath program at a hospital in Florida which does not also offer open heart surgery. At Martin Memorial, 1,885 inpatient and outpatient caths were performed in 1999, 1,770 in 2000, and 1,286 in the first nine months of 2001. Cardiac caths are only performed at the Stuart facility. Non-invasive cardiology services began in the 1970's at Martin Memorial. A CON to establish the first cardiac cath lab was issued in 1989, and a second, CON-exempt cath lab opened in 1998. Martin Memorial also offers pacemaker implants and peripheral angioplasties to eliminate clots in other areas of the body, for example, in the legs, electrocardiography, echocardiography, stress tests, and cardiac rehabilitation. Neither electrophysiology studies nor defibrillator implants are performed at Martin Memorial. Martin Memorial has an open staff of cardiologists, meaning that its cath lab is available for use by any of the invasive cardiologists on staff. The facilities include two cardiac cath procedure rooms, a control room for the laboratory, a five-bed holding room and a two-bay inpatient recovery area. Bethesda also has an established cardiac cath program with an open staff. Seventeen cathing physicians were listed on the Bethesda roster for the month of March 2001. Of those, five were also the only cardiologists allowed to perform caths at the closed lab at JFK. Some of these cardiologists are permitted to perform emergency angioplasties at Bethesda. Bethesda has, at least, two cardiovascular surgeons on staff. From 1995 to 1998, the volume of cardiac caths at Bethesda increased over 60%, from 133 to 213. For the 12 months ending August 31, 2000, Bethesda cardiologists performed 428 caths. For the 12 months ending September 30, 2001, the cath volume was 506 cases. Currently, cath procedures at Bethesda are performed in one lab with recently upgraded digital equipment. As part of the planned expansion of the hospital, the existing lab will be relocated and a second one added. Permanent pacemakers are implanted at Bethesda, but internal cardioverter defibrillator procedures, electrophysiology, and table studies are not performed. Cardiac cath services, at BRCH, started in 1987. Two cath labs with state-of-the-art digital equipment are used. In the 12 months ending March 31, 2001, there were 667 inpatient and outpatient caths performed at BRCH. Currently, cardiac services at BRCH are the largest source of admissions, approximately 20% of total admissions. The available services include echocardiography, tilt table studies, electrocardiography, stress tests, cardiac wellness and rehabilitation programs, electrophysiology studies, and internal cardioverter defibrillator implants. Each year, one or two "rescue" or salvage angioplasties are performed in extreme, life- threatening circumstances at BRCH. Forty-nine cardiologists are on the closed "invitation-only" medical staff at BRCH, 47 are board-certified and approximately half are invasive cardiologists. The staff also includes seven electrophysiologists, five of whom are board-certified, and seven thoracic surgeons, five of whom perform open heart surgeries at other hospitals. For the first two years of operating an open heart program, BRCH intends to have a closed program, by virtue of an exclusive contract with a single group of cardiovascular surgeons. Subsection 408.035(1)(a) - district health plan preference for serving patients regardless of county of residence or ability to pay; and Subsection 408.035 (1)(n) - history of and proposed services to Medicaid and indigent patients Martin Memorial, Bethesda, and BRCH will serve patients regardless of residence and, they contend, will enhance access for Medicaid, indigent, charity and/or self-pay patients. Each applicant has offered to care for patients in some of these categories as a condition for CON approval. The proposed conditions, are, for Martin Memorial, 2.4% of total project revenues for charity and 2% of admissions for Medicaid patients. Martin Memorial provides a number of services without charge, including follow-up education to former inpatients to assist them in managing diseases such as asthma, diabetes, congestive heart failure and chronic obstructive pulmonary disease. Obstetric care includes one free home visit by a nurse/midwife to check the health of newborns and mothers. Office space is provided for a free clinic for the "working poor" of Martin County, which receives approximately 10,000 annual visits from a patient base of about 2,000 patients. Over $100,000 a year is provided for an indigent pharmacy program. Combining the outreach services with other charitable contributions, including charity care, Martin Memorial valued "community benefits" at $24 million in 1998, $30.5 million in 2000. When Martin Memorial received an inpatient cardiac cath CON, it agreed to provide a minimum of 2.5% of total cardiac caths to Medicaid patients and 3% to charity care. Due to changes in state regulation, Medicaid and charity care for cardiac caths no longer needs to be reported to the state. That data, representing as it does, the base of patients from which open heart cases will come, is useful in evaluating Martin Memorial's projections. In 1999, seven-tenths of one percent of the patients in Martin Memorial's cath lab were Medicaid and four-tenths of one percent were indigent. In 2000, seven-tenths of one percent were Medicaid and two-tenths of one percent were indigent. Martin's cath lab data indicates that its projected open heart levels of Medicaid and indigent care are not attainable. Bethesda offered a commitment to provide 3% of total open heart cases for Medicaid patients and 3% to indigent patients annually. Historically, Bethesda has cared for a relatively large number of Medicaid, minority, and indigent patients. It is recognized as a disproportionate share provider of Medicaid care under the Florida program and of Medicare under the Federal program. The Palm Beach County Health Department provides approximately $1 million a year to Bethesda for charity care. As a percentage of gross revenue, Bethesda provided 8.8% Medicaid and 3.46% charity care in 1999. Approximately 54% of the charity care is attributable to obstetrics and pediatric services. Bethesda's younger patient base and the number of adult open heart Medicaid cases from Bethesda's service area, 2.4% or 7 cases in the year ending September 2000, raise the issue of its ability to generate sufficient cases to meet the proposed commitment. In 1995, 20 of the 36 total resident Medicaid open heart surgeries were performed at the three providers in District 9, Delray, JFK, and PBGMC. In 1999, when Lawnwood began open heart care, the Medicaid volume at the District providers increased to 51 of the 64 total Medicaid resident cases. In 2000, the four programs treated a net number of 56 of 60 resident Medicaid cases. A program at Bethesda also could reasonably be expected to increase the number of Medicaid and charity cases performed in the District, in volume and by reversing outmigration, but the patients must come from a base of patients with cardiac diagnoses. For the year ending September 2000, in Bethesda's service area, 4.9% of cardiac patients were Medicaid and charity patients combined, 1.6% Medicaid and 3.3% charity. Assuming that the same proportions could be maintained for open heart surgeries, Bethesda cannot achieve 3% Medicaid and, although unlikely, has a chance of reaching 3% charity only in the best case scenario. If approved, BRCH commits to providing 5% of total OHS in the second year to uninsured patients and to establish an outreach program to increase utilization by uninsured patients. BRCH has, over the past three and a half years, established outreach programs, which include having nurses and social workers in schools, providing free physical examinations to children who do not have primary care doctors, and performing echocardiograms for high school athletes, equipping police and fire rescue units with portable defibrillators, and operating mobile units for mammography screenings and vans to transport patients to and from their homes for hospital care. A free dental screening program is operated in conjunction with Nova Southeastern University. BRCH also operates a family medical center approximately seven miles west of the hospital. Recently, the Foundation for BRCH purchased, for $1.8 million, a large bus to equip as a mobile clinic. The mobile diagnostic unit is intended to reach uninsured patients to provide primary care and ultimately open heart surgery care to those who might not otherwise be screened, diagnosed and referred. No information was available and no decisions had been made about the staff and equipment, or service areas for use of the van. Because of the lack of more specific plans, it is impossible to determine whether the outreach effort has any reasonable prospects for success in meeting any unmet need. For the years ending June 1996, 1997, and 1998, BRCH provided six-tenths of one percent, and five-tenths of one percent of gross revenues for charity care. In 2000, BRCH provided one-half of one percent for charity care and, in 2001, twenty-seventh hundreds of a percent. The historical levels do not support the proposed commitment of 5% of open heart surgeries for uninsured patients in the second year of the program. Although worded to apply only to the second year, BRCH's President and CEO testified concerning the condition without limiting it to the second year. In Boca Raton Community Hospital, Inc.'s Proposed Recommended Order (Reformatted), filed on July 5, 2002, the condition is described as follows: 49. As conditions of CON approval, Boca will, beginning in the second year of operation of the program and continuing thereafter, provide a minimum of five percent each year of OHS cases to uninsured patients, and establish an outreach program to locate and provide OHS and cardiology services to uninsured patients in Palm Beach County. (Boca Ex. 3 at Schedule C; Pierce, 1899). Boca reasonably decided to focus on the needs of the uninsured, rather than Medicaid patients, because of the low volume of Medicaid patients who require OHS services. (Pierce, 1902). At BRCH, Medicaid and Medicaid health maintenance organization (HMO) care as a percent of total ranged from 1.3% to 1.4% from 1996 through 1998. BRCH projected serving 1.2% to 1.3% open heart Medicaid cases, or four patients in the first year and 1.5% to 1.6%, or seven Medicaid patients in the second year. The projections are consistent with its history although BRCH offered no Medicaid condition. Bethesda and BRCH also claimed not normal circumstances exist in District 9 due to the disparity in open heart care for uninsured and Medicaid patients as compared to the insured. For uninsured residents of Palm Beach County during the twelve months ending June 30, 2000, the use rate was 4.7 per 1000, as compared to 21.8 per 1,000 for insured open heart patients. For angioplasty patients, the insured use rate was 38.2, but the uninsured rate was only 8.9. Assuming that the use rates should not be so different, the discrepancy in access for the uninsured is significant and unfortunate but was not shown to be a not normal circumstance in the health care delivery system. The applicants' proposals, unlikely as they are to meet even the proposed conditions, are inadequate to increase access materially for the uninsured. Comparisons of the level of Medicaid provided statewide to that provided in District 9 without consideration of other factors, including age and income levels, were not useful in analyzing access. Assertions that any discrepancy in care for potential Medicaid open heart patients constitutes a not normal circumstance are not substantiated by this evidence. Subsection 408.035(1)(b) and (2)(b) - availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing facilities in District Nine In 2006, the population in District 9 is projected to reach 1.2 million people, of which approximately 992,378 will reside in Palm Beach County, 119,573 in Martin County, 181,406 in St. Lucie County, 106,790 in Indian River County, and 31,140 in Okeechobee County. In District 9, throughout Florida, and in the United States, heart disease is the leading cause of death. In 2000, heart disease was the cause in 522 of 1,560 total deaths in Martin County, and 4,337 of 12,795 total deaths in Palm Beach County. From 1995 to 2000, the number of Florida residents having open heart surgeries increased 15.1%. During the same period of time, the number of District 9 resident cases, regardless of where the surgeries were performed, increased from 3,119, to 3,938, an increase of 755 OHS cases, or 24%. Palm Beach County residents represented 427 of the 755 increase, and 2,633 of the total of 3,938 resident cases. The distribution of the remaining 1,305 District resident cases by county was as follows: 597 from St. Lucie, 339 from Martin, 269 from Indian River, and 100 from Okeechobee County. More recent data, however, indicates trends towards a leveling off or even decline in the number, but an increase in the complexity of open heart procedures. Some experts describe open heart volumes having reached a "plateau" in the United States, in Florida, and in District 9. Last year, the number of open heart surgeries in the United States declined 22%. The statewide volume of cases was 32,199 in 1996, 33,507 in 1997, 34,013 in 1998, and 32,097 in 1999. At District 9 hospitals, open heart volumes were 1,670 in 1994, 1,841 in 1995, 2,152 in 1996, 2,407 in 1997, 2,527 in 1998, 2,656 in 1999, and 2,650 in 2000. Cardiac Catheterizations and Angioplasties The major reason given for the stable and declining open heart volume is the increase in the utilization of angioplasty, or therapeutic cardiac cathing, an alternative which costs less and is less invasive. Angioplasty procedures increased from 1995-2000, by over 2,500 cases for District 9 residents, and over 2,600 cases in District 9 hospitals, from 2,104 cases in 1995, to 4,714 in 2000. Among the procedures generally referred to as angioplasties are percutaneous transluminal angioplasty (PTCA) or balloon angioplasty, percutaneous transluminal coronary rotational atherectomy (PTCRA), and the insertion of scaffolding- like devices, called stents, to prevent re-occlusion of coronary arteries. In Florida, diagnostic cardiac caths may be performed at facilities which do not have angioplasty and open heart surgery programs, but angioplasties must be performed, except in rare emergency circumstances, only at hospitals which are licensed to provide open heart services, in case back-up surgery is needed. Lawnwood Regional Lawnwood is located in Fort Pierce, in St. Lucie County, which is second to Palm Beach County in population and in District 9 resident open heart cases. Lawnwood is owned by a subsidiary of HCA, the Hospital Corporation of America, formerly known as Columbia. HCA is a for-profit, investor-owned corporation which owns and operates approximately 200 hospitals in the United States. A $17 million addition at Lawnwood, designed for the open heart program, includes two dedicated operating rooms and a 12-bed intensive care unit. The Lawnwood program has a full-time staff of two surgeons and one additional surgeon who divides his time between Lawnwood and PBGMC. Lawnwood, having opened its program early in 1999, is not considered a mature program. In addition, Lawnwood has had some difficulties with accreditation and disputes with cardiologists. Lawnwood reported one open heart case in the first quarter of 1999, and 143 or 144 for the year. In calendar year 2000, between 330 to 340 open heart surgeries were performed at Lawnwood. In calendar year 2001, the volume was between 333 and 336 cases. Depending on the source of the data, the volume at Lawnwood was reported to be as high as 364 for the twelve months ending September 30, 2000; in a range from 336 to 396 for the twelve months ending March 31, 2001; and up to 412 for the twelve months ending July 2001. The variances result from seasonal patient utilization, and from AHCA’s use, for the fixed need pool, of the most current available data which it receives from the various local health councils. That data is submitted on handwritten or typed forms which are not uniform across districts. Subsequently, the hospitals provide electronic data tapes directly to AHCA, which if properly decoded, should provide more accurate statistics. While there may be variances either way, in this case, the lower volumes for Lawnwood were derived from the more reliable electronic tapes. Based on that data and the testimony of the cardiac surgeon who is the director of the program at Lawnwood, the annual volume of open heart surgeries was approximately 330 in 2000, and 348 in 2001. The new rule, adopted on January 24, 2002, reduces the minimum number required for existing programs to 300 a year, or 25 adult operations a month. The number of angioplasties performed at Lawnwood increased from 465 in 1999, to 845 in 2000. Palm Beach Gardens Medical Center South of the four relatively small northern counties in District 9, PBGMC has 204 beds located in northern Palm Beach County. It is a subsidiary of Tenet Healthsystem Hospitals (Tenet). Adult open heart surgery has been available at PBGMC since 1983. The surgeries are typically performed in two or three of the 11 operating rooms, although five are equipped to handle open heart cases. PBGMC has 94 telemetry beds, and 32 intensive care beds, eight designated for cardiovascular intensive care patients. PBGMC has four cardiac cath labs and separate electrophysiology labs. The medical staff of approximately 400 physicians includes about 200 cardiologists, 24 invasive cardiologists and seven cardiac surgeons. The number of open heart cases at PBGMC was 700 in 1994, 801 in 1995, 913 in 1996, 1,028 in 1997, 1,045 in 1998, 1,124 in 1999, 940 in 2000, and 871 in 2001. The number of angioplasties increased from 552 in 1994, to 1,019 in 1997, to 1,431 in 2000. JFK JFK, which has 387 beds, is located roughly in the center of Palm Beach County, in the City of Lake Worth. Like Lawnwood, JFK is an HCA's subsidiary, having been purchased by that corporation in 1995. Open heart services and cardiac cath services began simultaneously at JFK in 1987. JFK has three open heart operating rooms. JFK, after a major expansion, has a separate entrance to its three cardiac cath laboratories, a dedicated electrophysiology suite, for treatment of arrhythmias, and 17- patient holding area. JFK provides all cardiac services, except heart transplants. The average age of patients at JFK is 74 years old. The medical staff of 504 board-certified or board- eligible physicians includes 25 cardiologists, five invasive cardiologists, two electrophysiologists, and three cardiac surgeons. JFK has recently accepted applications from but not yet extended privileges to three additional cardiovascular surgeons. Volumes of open heart cases at JFK were, with some variances depending on the data source, approximately 428 in 1994, 434 in 1995, 630 in 1996, 674 in 1997, 711 in 1998, 613 in 1999, 621 in 2000, and 610 in 2001. The number of angioplasties ranged from 709 in 1994, to 1,152 in 1997, to 1,281 in 2000. Delray Delray, with 343 beds, in Delray Beach, is the trauma center for southern Palm Beach County. Open heart care began at Delray in 1986. The surgeries are currently performed in three of ten, but soon to be a total of twelve operating rooms with shelled-in spaces set aside for two more. Patients recover in a 15-bed surgical intensive care unit. The Delray medical staff of over 600 physicians has close to 60 cardiologists, including 15 invasive cardiologists and six cardiovascular surgeons. Delray has three cath lab rooms and seven bays for holding patients pre- and post-procedure. For the years 1994 through 2001, open heart volumes at Delray were 542, 606, 609, 705, 771, 758, 759, and 738, respectively. During the same period of time, the annual number of angioplasty procedures increased from 591 in 1994, to 810 in 1997, to 929 in 2000. The existing CON-planned and approved programs in the District are well distributed geographically and allocated appropriately based on population. Considering the declining utilization, the like and existing open heart surgery programs are available and accessible. Subsection 408.035(1)(f) - services that are not reasonably and economically accessible in adjoining areas Over 30% of District 9 resident open heart cases are performed in other districts, the vast majority at North Ridge in District 10 (Broward County). The district outmigration for a service when excessive or difficult can indicate access or quality concerns and constitute a not normal circumstance for approval of a new program. In this case, with adequate available services in District 9 and its close proximity, the outmigration to North Ridge, which is 15 miles or 25 minutes from BRCH is not a not normal circumstance. There is also substantial overlap in the medical staff at both hospitals which allows continuity of care for patients despite transfers. The argument that families, particularly an older spouse, will necessarily have to drive farther to visit the patient is rejected, since that depends on where in the district the person resides not on the distances between hospitals. North Ridge has 391 licensed beds, with 260 to 270 acute care beds in use. At North Ridge, cardiovascular surgeons usually use three OHS operating rooms, although a fourth is also available. Open heart patients recover in a six-bed cardiovascular intensive care unit. The reported volumes of open hearts at North Ridge have been from 1994 through 2001, respectively, 864, 935, 893, 826, 882, 890, 905, and 795. The total number of open heart cases in District 10 has been declining since 1998. The volume of angioplasties at North Ridge increased from 793 in 1994, to 829 in 1997, to 1,155 in 2000, consistent with a rising District 10 use rate from 2.95 to 3.66 over the same period of time. The staff at North Ridge includes 107 cardiologists, 27 interventional cardiologists, and 17 cardiovascular surgeons, many of whom also regularly perform open heart surgeries at Holy Cross, which is approximately a mile south of North Ridge in Fort Lauderdale. At Holy Cross, which also has established referral networks from District 9, open heart volumes declined from a high of 753 in 1998 to 693 in 2000. All of the open heart services proposed by the applicants are reasonably available in adjoining areas, in Districts 10 and 11 to the south and in the other districts to the north. Subsection 408.035(1)(c) - comparisons of quality; and Subsection 408.035(1)(e) - joint, cooperative or shared resources; and Subsection 408.035(1)(g), (h), and (k) - need for research, educational and training programs or facilities for medical and health care professionals; and Subsection 408.035(1)(h) and Rule 59C-1.033 - recruitment, training and salaries for staff The parties stipulated that the applicants have a history of providing quality care. Martin Memorial was accredited with commendation by the JCAHO in 1997, which is now called accreditation without Type I Recommendations. That was followed, in July 2001, with a score of 93 on survey items with some follow-up improvements required related to patient assessment and nutrition. Martin Memorial offers internships, and residencies for training non-physician medical personnel from Barry University, Indian River Community College, and Florida Atlantic University. The cancer center at Martin Memorial is affiliated with the Moffitt Center. Despite the absence of an open heart program, Martin Memorial has participated in clinical trials of cardiac drugs. The Shands Healthcare System of nine affiliated hospitals, including two research and teaching hospitals, is the model for the relationship proposed with Martin Memorial. The partnerships are intended to upgrade the care available in community hospitals and to establish, for complex cases, referral networks for the Shands teaching hospitals. Shands has already satisfied itself that Martin Memorial meets its due diligence test for the quality of its existing program and philosophical compatibility. If Martin Memorial's CON is approved, Shands will assist in training staff for the program. Initially, the program will have one cardiovascular surgeon, a University of Florida medical school faculty member, in Martin County. When that surgeon is ill or on vacation, others from the University of Florida will be available. The logistics of the plan raises questions about the adequacy of coverage to meet the 24-hour requirements of Rule 59C-1.033, Florida Administrative Code. In the JCAHO survey process, Bethesda received a score of 97, as a result of its survey in June 2000, and was accredited for the maximum allowable time, three years. Personnel for a Bethesda program can be appropriately trained at Orlando Regional, a statutory teaching hospital with a high volume open heart program. In June 2000, BRCH received a JCAHO score of 96. BRCH maintains a scholarship program for new nurses making a two-year commitment, and an on-site educational department with a preceptorship for training operating room and emergency room nurses. Nursing students from Florida Atlantic University (FAU), which is located across Glades Road from BRCH, rotate at BRCH. FAU is in the process of establishing a medical school. There is a severe shortage of nurses in the United States, in Florida, and in District 9. All of the hospitals in District 9 have resorted to highly competitive and innovative recruitment and retention strategies, including international recruiting, signing bonuses, child care and, of course, rising salaries and benefits. The demand is greater and shortages more severe in highly specialized areas, such as critical care, telemetry and open heart surgery nursing. The average age of nurses has also increased to 46 or 47 years old, while enrollment in nursing schools and the number of nursing school professors have declined. All of the applicants concede that recruiting and retaining nurses for new open heart program will be a challenge. The likely results are a loss of experienced nurses from existing programs, an increase in total health care costs, an increase in vacancies, and, at least temporarily a decline in the quality of experienced nursing care in existing open heart programs. At this time, there is no evidence that declining open heart utilization will eventually alleviate the shortage of experienced nurses. It has, so far, only eased the need to resort as frequently to other extreme and expensive alternatives, including pay overtime, contracting with private agencies, and bringing in traveling nurses. Subsection 408.035(1)(m) - size, scope and fixed equipment cost at BRCH; Subsection 408.035(2)(c) - alternatives to new construction; and Subsection 408.035(1) (h) - funding for BRCH BRCH plans to construct a 74,000 square-foot cardiac care facility, which will include two open heart operating rooms and two cardiac cath labs, an electrophysiology lab, 12 cardiovascular intensive care beds, and 18 cardiac cath lab bays. Only 18,568 square feet are attributable to the open heart operating rooms and cardiovascular intensive care unit which compares favorably with Bethesda's estimate of 17,759 square feet for the same functions. It is not possible, therefore, to conclude that the size of the BRCH project is excessive as compared to that proposed by Bethesda. BRCH underestimated the cost for fixed equipment for the open heart project by approximately $1.6 million. That omission resulted in understated estimates of depreciation by approximately $275,000. The total project cost for BRCH is approximately $2.2 million when almost $2 million in omitted equipment costs is added to the original estimate of $20 million. All pending capital projects, as shown on Schedule 2 of the BRCH application, total $54 million. With combined cash and investments of $160 million, the BRCH foundation has sufficient funds for the hospital's projects. Although BRCH earned profits of $6.6 million and $7.3 million in 1998 and 1999, respectively, the hospital lost $30 million from operations due to billing and collection errors in 2000. BRCH has a donor who has stated a willingness to donate $20 million for the cardiac care center. BRCH has the funds necessary to build the facility. With Medicare capital cost reimbursement completely phased out, there is insufficient evidence of a direct impact on health care costs based on this proposed capital expenditure. Subsection 408.035(1)(i) - short and long term financial feasibility Martin Memorial initially projected that its program would perform 360 open heart surgeries in year one and 405 in year two. As a result of changes in the use rate, Martin Memorial lowered its second year projection to 375 surgeries while increasing staffing levels. Even if projected open heart surgery revenues of $264,000 in the second year decline in proportion to expected lower utilization, estimated angioplasty revenues of $468,000, are sufficient to make up the deficit and to keep the combined program financially feasible in the short and long term. Bethesda projected volumes of 165 open heart surgeries in the first year and 270 in the second year. Assuming Bethesda's revenues are 90% of the district average, the combined net profit for open heart and angioplasty services is reasonably expected to be approximately $750,000 in the second year operations. The project is profitable, therefore, financially feasible in the short and long term. BRCH's expert projected volumes of 308 open heart surgeries and 289 angioplasties in the first year, and 451 open heart surgeries and 422 angioplasties in the second year. If utilization projections are correct, then BRCH will receive incremental net income of $1.6 million from the open heart surgery program and $825,000 from the angioplasty services. Factoring in claims that the Medicare case weight was overstated and depreciation underestimated, the BRCH project is, nevertheless, financially feasible for the short and long term. Typically, any open heart surgery program that can reach volumes in the range of 200 to 250 cases, will be financially feasible. The establishment of an open heart program also has a "halo effect," for the hospital, attracting more patients to the cardiac cath labs and other related cardiology services. Open heart surgery and angioplasty tend to be profitable, generating revenue which hospitals use to offset losses from other services. Subsection 408.035(1)(j) - needs of HMOs All of the applicants will enter into contracts with, but none is a health maintenance organization. Subsection 408.035(1)(l) - probable impact of fostering competition to promote quality assurance and cost-effectiveness Hospitals with higher volumes of open heart surgeries and angioplasties usually have higher quality as measured by lower mortality rates and fewer complications. The open heart surgery rule, in effect at the time the applications were filed, established a minimum volume of 350 annual admissions for existing providers. In the rule as amended on January 24, 2002, the minimum volume for existing programs was reduced to 300. The divisor in the formula for determining need, which represents the average size of a program in the district, was 350 prior to amendment and 500 subsequently. The minimum and average volumes in the rule set, in effect, the protected range for existing programs, not the optimal size, or "cut point" at which outcomes are worse below and better above. According to the American College of Cardiology and American Heart Association (ACC/AHA) the evidence is clear that outcomes are better if an individual performs at least 75 procedures at a high volume center with more than 400 cases. The ACC/AHA guidelines indicate, although more controversial and less clearly established, that acceptable outcomes may be achieved if the individual operator performs at least 75 procedures in centers with volumes from 200 to 400 cases. Because the relationship between higher volumes and better outcomes is continuous and linear, and because research showing the benefits of primary angioplasty with or without open heart surgery back-up is preliminary and limited, the position of the ACC/AHA is, in summary, as follows: The proliferation of small angioplasty or small surgical programs to support such angioplasty programs is strongly discouraged. (Journal of the American College of Cardiology, Vol. 37, no. 8 June 15, 2001, pp. 2239xvii (Tenet Exhibit 5)) An open heart program at Martin Memorial will redirect cases that would otherwise have gone to Lawnwood, PBGMC, and JFK. The proposed Martin Memorial Service area overlaps that of Lawnwood in southern St. Lucie County, an area which generates one quarter of the open heart cases at Lawnwood. Lawnwood is reasonably expected to lose 56 open heart cases a year with total volume going down below 300, resulting in loss of $1.8 million, or 20% of its total revenues. Lawnwood would have unacceptably low volumes threatening the quality of the open heart program. PBGMC, as a result of a new program at Martin Memorial, will lose approximately 170 and 180 open heart cases annually and an equal number of angioplasties reducing its open heart volume to approximately 700 a year. The financial loss would range from $4 to $5 million a year, as compared to total net income which was between $20 and $30 million a year for past three years. PBGMC would not suffer an adverse impact sufficient to threaten either the quality or the financial feasibility of the open heart program or total hospital operations. JFK, which currently receives most of the angioplasty referrals from Martin Memorial, is expected to lose from 25 to 30 open heart cases, and 65 to 70 angioplasties each year during the first two years of a Martin Memorial program. The estimated financial loss to JFK is $1.7 million, a significant detriment when compared to $2.8 million in net income from operations in calendar year 2000. Approval of open heart program at Bethesda will adversely affect case volumes at JFK and Delray. Bethesda projected that, in its first year, 75% of its cases would have gone to Delray and 25% to JFK, and that by the third year, the split would be even at 50% from Delray and 50% from JFK. JFK, depending on the approach to the impact analysis, will lose from 40 to 60 open heart cases in the first year, from 90 to 110 in the second year, and from 115 to 170 in the third year of a program at Bethesda. The volumes of lost angioplasties is expected to be slightly higher. The resulting combined open heart and angioplasty financial loss is $6.6 million, far greater than the significant detriment expected from a Martin Memorial program alone. The annual volume of open heart cases at JFK would be approximately 400 to 500, assuming flat not continued declining utilization. If Bethesda offered the service, Delray's open heart volumes would decline by 124 cases in the first year and by 248 cases in the third year of operations, decreasing total volume to 500 or 600 annual surgeries. Delray had a net income from operations of approximately $24.7 million in 2000, which would indicate that neither quality nor financial stability would be significantly adversely affected. If an open heart program is approved for BRCH, the volumes of cases at Delray and North Ridge will decline. Delray would be expected to lose 163 open heart cases and 235 in years one and two, respectively, and equal numbers of caths and angioplasties, resulting in annual open heart cases reduced from the low 700s to approximately 500 cases. Delray's pre-tax revenue was $39 million in 2001. In terms of quality and financial stability, Delray can withstand the adverse impact of a new program at BRCH. North Ridge would lose approximately 124 open heart cases in year one and 178 in year two, and similar numbers of caths, reducing open heart volumes from the upper 700s to approximately 600 annual cases. North Ridge's pre-tax income was $21 million for the year ending May 31, 2001. It appears that North Ridge could, even with the adverse impact of BRCH, maintain a quality, financially viable open heart program. Subsection 408.035(l) - probable impact on costs The applicants, all not-for-profit corporations, contend that the fact that District 9 has only for-profit open heart hospitals affects charges and is a not normal circumstance for the approval of one or more not-for-profit. District 9 is the only district in Florida in which all open heart providers are for-profit corporations. Statewide, not-for-profit open heart hospitals charge 31% less than for-profit. Martin Memorial's CON proposal includes a charge structure below that at existing programs. Bethesda's planned charges are 10% less than the District 9 average for open heart and angioplasty services. BRCH is the applicant which is most likely to increase competition in District 9, based on the Herfindahl-Hirschman Index (HHI). The HHI's measurement of competition in a market used by economists frequently to analyze anti-trust issues. Charges are not a factor in up to 75% of open heart/angioplasty cases reimbursed by payors, such as Medicare, at set flat rates. In approximately 10% of cases, including complex "outlier" cases exceeding the range for flat rate reimbursement and for other payors on a percent-of-charges basis, charges are not irrelevant. But, the evidence to demonstrate lower charges were applicable to patients of the same severity was questionable. Subsection 408.035(1)(o) - continuum of care There is insufficient evidence the any applicant is preferable based on its ability to promote a continuum of care in a multilevel system. Subsection 408.035(2)(a) - alternatives to inpatient services There are no alternatives to inpatient services for open heart surgery and angioplasty patients. Subsection 408.035(2)(d) - patients who will experience serious problems in the absence of the proposed new service The applicants and AHCA determined that new open heart surgery programs are needed mainly to provide emergency or "primary" angioplasty to patients suffering heart attacks (acute myocardial infections). Primary angioplasty is an alternative to "clot busting" medications, or thrombolytics, and to open heart surgery. Performed on an emergency basis, the three different treatments are used to restore blood flow before heart muscle dies. Because "time is muscle," patients benefit only if treated within a relatively short time after the onset of symptoms. The goal is 90 minutes from door-to-balloon for angioplasty. The decision to treat a patient with a particular therapy is based on a number of factors assessed during triage. Paramedics in consultation with ER doctors at the receiving hospital frequently begin triage and administering medications and oxygen in ambulances equipped with sophisticated diagnostic equipment. As the statistical data demonstrates, angioplasty, whether scheduled or emergency, is increasingly becoming the preferred therapy. Some studies have shown improved outcomes, higher survival rates and fewer complications, from primary angioplasty as compared to thrombolytics. Comparisons have not been made over extended periods of time, and the apparent benefits of angioplasty have not been duplicated in community hospitals as compared to clinical trials in high volume research centers. Estimates of the number of people who could benefit from the availability of angioplasty services at the applicants vary based on the number of elderly in the service area, the number of non-traumatic chest pain ER visits, delays in transfers of emergency patients, and the number of patients being transferred to existing providers for angioplasties or open heart surgeries. Martin Memorial selected five patients as examples of those who could be served in an open heart program at Martin Memorial. The anecdotal evidence of transfer "delays" is insufficient to demonstrate bed unavailability or capacity constraints. Martin Memorial-Stuart and Martin Memorial South transferred 240 heart attack patients to open heart surgery hospitals. Only 18 of the emergency heart attack patients who presented at the Martin Memorial ER were transferred from the ER. Approximately ten patients a year are so unstable that an intra- aortic balloon pump is required during transfer. Martin Memorial presented evidence of delays of two hours or more in transfers of 84 patients from its cath labs to open heart surgery hospitals. The transfer records, created for subsequent certificate of need litigation, were of questionable probative value. The case studies were inadequate to establish whether "delays" were reasonable or not. Factors such as physician consultation time, time to stabilize a patient for transfer and the assumed travel time seem to have been included in the time periods. Bethesda transferred 270 patients for cardiac care from October 1999 through September 2000. Thirty patients were transferred, from November 2000 to July 2001, for angioplasties or open heart surgery after having cardiac caths at Bethesda. Bethesda failed to establish that transfers were delayed due to capacity problems at existing hospitals because emergency patients were not classified separately, and the causes of the time lapses were not identified. Of the applicants, BRCH has the busiest ER, with 50,000 to 52,000 annual visits compared to approximately 48,000 at the two Martin Memorial locations combined. BRCH admitted 439 heart attack patients through its ER during the year ending June 30, 2000. The majority of patients are treated with thrombolytics at BRCH. BRCH transfers approximately one emergency heart attack patient a week on average, or from 30 to 50 a year, for interventional cardiac procedures. BRCH's presentation of evidence of delays in transfers was flawed. The data was collected and used only for litigation, and was incomplete. Some patient records were lost and others were deleted due to inaccurate data. Of the applicants, BRCH is located in an area with the largest percentage of the population age 65 and older, approximately 35%, as compared to 24% in Martin Memorial's service area. Agency Consistency Martin Memorial, through expert witness testimony, compared its situation to that of Brandon, a hospital in AHCA District 6, which was issued an open heart surgery CON in 2001. The expert noted that Martin Memorial and Brandon are both in five county health planning districts, and that they are 19 and from 15 to 17 miles, respectively, from the nearest open heart provider. Three of the counties in District 6 have open heart programs, including Hillsborough County where Brandon is located, as compared to two District 9 counties, St. Lucie and Palm Beach, but not Martin. The Martin Memorial primary service area projected population is 238,861 for 2004, 24.1% aged 65 and older. The Brandon service area population projection is 309,000 for 2004, with 10.5% aged 65 and older. Brandon has 255 beds, Martin Memorial-Stuart has 236. Brandon had 53,000 emergency room visits, and Martin Memorial, at both locations, had 48,503 in 1999. Before defaulting to zero, the numerical formula yielded a need for 3.27 additional open heart programs in District 6 as compared to 3.9 in District 9. Other specific comparisons favorable to Martin Memorial included the number of heart attack patients presenting at its ER, cath lab volumes, patient transfers for open heart and angioplasty procedures. Among others, there are several significant distinguishing facts in Florida Health Sciences Center, Inc. v. Agency for Health Care Administration, Case No. 00-0481CON, (R.O. Mar. 30, 3001, F.O. Oct. 17, 2001) aff'd per curiam sub nom, University Community Hospital v. Agency for Health Care Administration, Case No. 1DO1-3592, et al. (Fla. 1st DCA Sept. 19, 2002), the Brandon case. In that case, the two existing providers performing fewer than 350 cases a year, Blake Medical Center, and Manatee Memorial Hospital, both in Manatee County, were mature programs located 40 miles from Brandon with no service area overlap. By contrast, Lawnwood which is not a mature program and, therefore, has not reached its potential volume, is 20 miles from Martin Memorial, and has an overlapping service area. Martin Memorial's ER volume and the number of transfers from its ERs are the combined experience from two locations. The more accurate comparison is 27,000 ER visits at Martin Memorial-Stuart to 53,000 at Brandon. Emergency heart attack patients presenting at Martin Memorial South would continue to require transfers for primary angioplasty. Finally, the decision in Brandon was based, in large part, on transportation difficulties, inadequate interfacility ambulances and traffic congestion, which are not factors in District 9. Factually, the case of Halifax Hospital Medical Center, d/b/a Halifax Medical Center v. Agency for Health Care Administration, et al., Case No. 95-0742 (AHCA Jan. 14, 1997) is also distinguishable. The applicant could have no effect on the low volume providers located 80 miles to the north. That was one not normal circumstance. Need existed because of another not normal circumstance, i.e., capacity constraints at the only other provider in the same primary service area. In Oak Hill Hospital v. AHCA, Case No. 00-3216CON (R.O. Oct. 4, 2001, F.O. Jan. 22, 2002), appeal dismissed sub nom Hernando HMA, Inc. v. HCA Services of Florida, Inc., Case No. 1DO2-854 (Fla. 1st DCA June 6, 2002), the two approved applicants were in separate counties which constituted entirely separate health care markets. Neither applicant would adversely affect the low volume providers. After the Administrative Law Judge recommended approval of the Citrus County applicant, AHCA, engaging in what appears to be a comparative review of the two remaining applicants from Hernando County, approved a second applicant from the same district at the same time. Some facts are similar to those in this case: The average drive time between hospitals was 30 minutes; transfers and admissions procedures required additional time; there was a recognition of increasing preferences for reperfusion of heart muscle using primary angioplasty; patients and families experience stress and anxiety as a result of transfers. Institution-specific issues included the transfer of 600 cardiac patients by ambulance from Oak Hill, the size of the cardiology and cardiac cath programs (1,641 caths in 1999), the larger elderly population in the service area, and the hospital's size.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order denying Certificate of Need Application Number 9248 filed by BRCH, Certificate of Need Application Number 9249 filed by Martin Memorial, and Certificate of Need Application Number 9250 filed by Bethesda. DONE AND ENTERED this 11th day of November, 2002, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of November, 2002. COPIES FURNISHED: Lealand McCharen, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Valda Clark Christian, General Counsel Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Gerald L. Pickett, Esquire Agency for Health Care Administration 525 Mirror Lake Drive, North Sebring Building, Suite 310K St. Petersburg, Florida 33701 Lori C. Desnick, Esquire Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Stephen A. Ecenia, Esquire David Prescott, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 W. David Watkins, Esquire R. L. Caleen, Jr., Esquire Watkins & Caleen, P.A. 1725 Mahan Drive, Suite 201 Post Office Box 15828 Tallahassee, Florida 32317-5828 H. Darrell White, Esquire William B. Wiley, Esquire McFarlain & Cassedy, P.A. 305 South Gadsden Street Post Office Box 2174 Tallahassee, Florida 32316-2174 Paul H. Amundsen, Esquire Amundsen, Moore & Torpy, P.A. 502 East Park Avenue Post Office Box 1759 Tallahassee, Florida 32302 Robert D. Newell, Jr., Esquire Law Firm of Newell & Terry, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 C. Gary Williams, Esquire Michael J. Glazer, Esquire Ausley & McMullen 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 Seann M. Frazier, Esquire Michael J. Cherniga, Esquire Greenberg Traurig, P.A. 101 East College Avenue Tallahassee, Florida 32302
The Issue Petitioner, St. Mary's, and Intervenor, BRCH contend that Rule 10- 5.011(1)(f), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority for the reasons more specifically set forth in St. Mary's Amended Petition for Administrative Determination of the Invalidity of a Rule. Respondent, HRS, and Intervenors, JFK, PBGMC, and Florida Hospital, contend that Rule 10-5.011(1)(f), Florida Administrative Code, constitutes a valid exercise of delegated legislative authority. BACKGROUND AND PROCEDURE Petitioner, St. Mary's, presented the oral testimony of Philip Rond, W. Eugene Nelson-Michael L. Schwartz, and James McElreath. Petitioner submitted 9 exhibits at formal hearing, 8 of which were admitted in evidence. Pursuant to a stipulation among the parties, St. Mary's subsequently had admitted an after- filed deposition of Frank R. Sloan. Intervenor BRCH had admitted in evidence 1 exhibit but called no witnesses. Respondent HRS presented the oral testimony of Elfie Stamm and Reid Jaffe. Respondent HRS had 4 exhibits admitted in evidence. At formal hearing, Intervenors JFK and PBGMC presented the oral testimony of Mark Richardson which was also adopted by HRS as its own. Pursuant to a stipulation among the parties, JFK and PBGMC subsequently had admitted an after- filed deposition of Harold B. Luft which was also adopted by HRS. Official recognition of JFK's Petition in DOAH Case No. 86-4368 was granted. PBGMC had 1 exhibit admitted in evidence at formal hearing. Intervenor Florida Hospital, submitted no exhibits and adopted the testimony of HRS' witnesses. The Hearing Officer received two documents into evidence as Hearing Officer Exhibits, the Prehearing Stipulation between the parties in this proceeding and a copy of Rule 10-5.011(1)(f), Florida Administrative Code. Official recognition was taken of the Final Order dated July 27, 1987, in St. Francis Careunit v. Department of Health and Rehabilitative Services, et al., DOAH Case No. 84-2918. Subsequent to the filing of the transcript herein, and pursuant to time waivers and stipulations among the parties, St. Mary's and BRCH filed their joint proposed final order; JFK and PBGMC filed their joint proposed final order; and HRS and Florida Hospital filed individual respective proposed final orders. The parties' respective proposed findings of fact are ruled upon in the Appendix to this Final Order, pursuant to Section 120.59(2), Florida Statutes. Additionally HRS' Motion to Strike Portions of the Joint Proposed Findings of Fact of St. Mary's and Intervenor BRCH, and JFK's Motion to Strike are ruled upon within this Final Order and its Appendix.
Findings Of Fact St. Mary's is an existing general acute care hospital in HRS Service District 9, West Palm Beach, Florida. St. Mary's has pending before the Division of Administrative Hearings DOAH Case No. 86-4368 concerning its certificate of need (CON) application for an open heart surgery program at St. Mary's which was preliminarily denied by HRS (CON Action No. 4551). Rule 10- 5.011(1)(f), Florida Administrative Code, was utilized by HRS in evaluating St. Mary's CON application and was relied upon by HRS in its decision to deny CON Action No. 4551. Pursuant to that HRS review, there is no numerical need for the St. Mary's proposed program, based upon HRS' application of the quantitative need methodology contained in the Rule. St. Mary's is substantially affected by Rule 10-5.011(1)(f), Florida Administrative Code, and consequently has standing to seek administrative determination of the validity of said rule through this present cause. BRCH is an existing general acute care hospital in HRS Service District 9, Boca Raton Florida. BRCH has pending before HRS a CON application for an open heart surgery program at BRCH (CON Application No. 5194) which is currently being reviewed by HRS in accordance with Rule 10-5.011(1)(f), Florida Administrative Code. BRCH is substantially affected by Rule 10-5.011(1)(f), Florida Administrative Code, and consequently has standing to seek administrative determination of the validity of said rule through this present cause. JFK is an existing general acute care hospital in HRS Service District 9, Lake Worth, Florida, which has in place its open heart surgery program. JFK's open heart surgery program opened and closed in 1986. On the date of formal hearing, JFK had scheduled to reopen its open heart surgery program in August, 1987. The program is subject to regulation pursuant to Sections 381.493-499, Florida Statutes, (1985), and regulations promulgated thereunder, including Rule 10-5.011(1)(f), Florida Administrative Code. JFK is an Intervenor in opposition to St. Mary's application in DOAH Case No. 86-4368 alleging that due to the service area and medical staff overlaps between St. Mary's and JFK, there will be adverse staffing, economic, availability, and quality impacts upon JFK. PBGMC is an existing general acute care hospital in HRS Service District 9, Palm Beach Gardens, Florida, which has in place an open heart surgery program. Its program is likewise subject to regulation pursuant to Sections 381.493-499, Florida Statutes (1985), and regulations promulgated thereunder, including Rule 10-5.011(1)(f), Florida Administrative Code. PBGMC is an Intervenor in opposition to St. Mary's application in DOAH Case No. 86- 4368 alleging that due to the service area and medical staff overlaps between St. Mary's and PBGMC, there will be adverse staffing, economic, availability and quality impacts upon PBGMC. Florida Hospital is an existing general acute care hospital in Service District 7, Orlando Florida, which has in place an open heart surgery program. It is subject to regulation pursuant to Sections 381.493-499, Florida Statutes (1985), and regulations promulgated thereunder, including Section 10- 5.011(1)(f), Florida Administrative Code. It may be inferred that a determination of invalidity of the Rule wall impact upon Florida Hospital if, as a result thereof CONs are granted for other open heart surgery programs in that District, but there is no direct evidence to that effect. No direct threat of revocation of Florida Hospital's existing CON or of economic or other impact of this rule challenge upon Florida Hospital was demonstrated by Florida Hospital at formal hearing. Respondent, HRS, is responsible for the administration of Sections 381.493-499, Florida Statutes, (the CON statute) and Chapter 10-5, Florida Administrative Code, (the CON rules). The initial development of the Rule was undertaken in 1982 and 1983 in a manner consistent with HRS internal policy. HRS reviewed the relevant literature relating to open heart surgery programs and services. Included among the literature reviewed were the National Guidelines for Health Planning (National Guidelines or Guidelines) and the standards for review of applications for certificates of need (CON) for open heart surgery services proposed by several Health Systems Agencies. At the time those standards were developed, the Health Systems Agencies were responsible for the first level of review in the state certificate of need process. Originally, the companion to the open-heart surgery rule, was Rule 10- 5.011(15), now codified as Rule 10-5.011(1)(e), Florida Administrative Code, which rule sets forth criteria for cardiac catheterization lab CON applications. Considerably more emphasis was accorded the development of the companion rule initially, but even expert witnesses for Petitioner's view acknowledge that the rule promulgation process relative to the adoption of the open heart surgery rule was thorough, rational, and essentially non-remarkable in the scope of promulgation of numerous CON rules drafted and implemented for the first time during a period in which HRS was also developing other rules dealing with a broad range of services and facilities to comply with new legislation eliminating Health Systems Agencies and requiring HRS to adopt uniform methodologies to be used in the CON program. Subsequent to its review of the literature, HRS formed a work group to assist in the development of the Rule. HRS prepared a draft of the proposed Ruled which was sent to over fifty experts in the field of cardiology. HRS received extensive comments on the draft rule. The final proposed Rule was published in the Florida Administrative Weekly. A public hearing on the proposed Rule was held in December, 1982, during which extensive public comment was received. The public comments were reviewed by and discussed among the HRS' health planning staff and administration. Upon consideration of all the input received, the final draft of the initial rule abandoned a proposal to rely on 1979 utilization data and substituted 1981 data. Additionally, provision was made to allow for consideration within the Rule's need formula of approved, but not yet operational, open heart surgery programs. The Rule was then filed for adoption and went into effect February 14, 1983. Because it was deemed prudent, and because the National Guidelines provided for it, HRS intended, at the time the initial open heart surgery rule was promulgated, to revisit the components of the Rule every 2-3 years. The Rule was next amended in 1986. At that time, in response to public comment, "Uc" of Subparagraph 8 of the Rule, which prescribes the base period to be used in the calculation of a service area use rate, was substantially revised. In its initial form, element "Uc" was based on the 1981 service area actual use rate. As amended, "Uc" measures the actual use rate in the service area for a 12 month period beginning 14 months prior to the letter of intent deadline for the batching cycle at issue, or the most recent use rate available to HRS. There have been no other substantial amendments which impinge upon the instant Rule challenge. Among other allegations, Petitioner asserts that because the Rule is silent as to which or however many exceptional circumstances would have to exist in order to justify approval of a CON application for an open heart surgery program in the absence of numerical needs the Rule is arbitrary and capricious. The evidence and applicable case law do not support such a premise. The Rule provides that HRS will consider applications in the context of applicable statutory and rule criteria. See 10-5.011(1)(f)2. The Rule further provides that HRS will "not normally" approve applications for new open heart surgery programs unless the conditions of subparagraphs 8 and 11 of the Rule are met. Also 10-5.011(1)(f)2. The very nature of "not normal" circumstances is that all possible "not normal" circumstances cannot be enumerated within a rule because in the attempt, some exceptionalities would inevitably be excluded. Of the four applications proposing new open heart surgery programs which have been approved in the recent past, three were approved under "not normal" circumstances, that is, where one or both provisions of Subparagraphs 8 and 11 were not met. The applicable state agency action reports (SAARS) which reflect HRS' preliminary position on CON applications, demonstrate that HRS routinely considers all relevant statutory and regulatory criteria in its review of open heart surgery program CON applications. There is no competent substantial evidence to show that HRS' evaluation of applications proposing new open heart surgery programs are prohibited by the Rule from entailing a balanced consideration of the statutory and regulatory criteria relevant to CON review. As a corollary of the foregoing allegation, it is alleged that because the Rule does not specifically address what has come to be known in CON practice as "the in-migration/out-migration" phenomenon, while at least one other CON rule does specifically address this phenomenon, a balanced consideration of all statutory criteria is frustrated, thereby resulting in understating the need for open heart surgery programs in one District/service area while enabling unnecessary, costly duplication of programs within other Districts/service areas. The use rate (discussed infra) purports to capture that in- and out- migration which can be standardized within the 12 month base period. At hearing, it was tenuously demonstrated that an unmeasured in-/out-migration phenomenon may exist within 2 out of 11 HRS Districts, but the degree to which it exists, if at all, is purely speculative. Even if these two Districts clearly possessed extraordinary timeframe, geographical, or transportation uniqueness, these access abnormalities would not justify declaring the Rule invalid. Rather, in the event the use rate for some reason does not measure them, these exceptionalities would be just the sort of "not normal" aberration for which it would be appropriate to resort to balancing of all statutory and rule criteria. Petitioner also contends that because this Rule does not define "service area" as the respective HRS Service District, it leaves each applicant free to designate, virtually at will, its own service area. Apparently, the initial Rule drafters intended that the service area be defined in the open heart surgery Rule as the HRS Service District. In finalizing Section (1)(e)(its companion cardiac catheterization lab rate rule), this definition was indeed included. However, in the open heart surgery rule, it was omitted. No witness recommended or even seriously considered that any service area less than the relevant HRS District should be designated, and the evidence is unrefuted and substantial that District lines have always been uniformly applied by HRS in interpreting the open heart surgery Rule. This interpretation is consistent with the agency's application of similarly silent rules. Petitioner alleges that because there is no Rule requirement or uniform manner for hospitals to report their open heart surgery utilization data to Local Health Councils or to HRS, the Rule is arbitrary and capricious. Authorized HRS representatives and others testified that data for the most current 12-month period, with a 2 month lag time are the most appropriate data to use. Testimony by St. Mary's experts that the data necessary to derive the rule methodology is not available, was directly refuted by evidence from authorized HRS representatives and others that HRS is able to collect all necessary data even though some councils report at different intervals from each other, and even though some hospitals report in "cases," others in "procedures" and one in "minutes." Because of these procedures of reporting, it may be necessary to make certain mathematical conversions or interpretations in preparing an agency SAAR or in presenting evidentiary proof in a Section 120.57 hearing, but even if one accepts that it is difficult to collect and interpret the necessary data, that concept does not support the conclusion that the Rule itself is arbitrary, capricious, or otherwise fatally flawed. Subparagraph 8 of the Rule defines Year X as the year in which the proposed open heart surgery program would initiate service but no more than two years into the future. St. Mary's contentions with regard to this provision are that the triggerpoint cannot be determined and that by allowing applicants in the same batching cycle to elect varying dates of initiating service, similarly batched applicants may select different horizons within the two year outside limit and therefore those two applicants could not be comparatively reviewed. It was shown that in the last batching cycle all applications were reviewed from the same trigger date and that HRS' implementation of the CON rules is guided by legal precedent. HRS' shifting of trigger dates in past batches is accounted for by shifting legal precedents. Therefore, assuming applicants in the same batch may unilaterally select different planning horizons within the traditional two year range permissible under the Rule, that is not sufficient to invalidate the Rule as arbitrary and capricious. The Rule establishes a need formula. Entitlement of applicants to "comparative review" is set forth in other statutory, ruled and case law authority. Applicants in the same batching cycle who elect significantly different horizon dates under the Rule probably ought not to be comparatively reviewed, but that problem is to be addressed within the context of "all statutory and rule criteria" both at the agency level in the case of initial review, and, when necessary, in the case of litigation before the Division of Administrative Hearings, by appropriate motion. The remainder of Petitioner's challenge addresses, in one form or another, the Rule's numerical need formula. The Rule establishes three thresholds which apply to utilization of open heart surgery programs. Subsection 3.d. requires that each program shall be able to provide 500 open heart operations per year." Each program is required to provide a minimum of 200 adult open heart procedures annually within 3 years of the initiation of service, with no additional programs to be approved in a service area until each existing program is operating at a minimum of 350 adult open heart cases. Subparagraphs 8 and 11 are the cornerstones of the numerical need formula provided in the Rule. Specifically, Subparagraph 11 of the Rule provides: There shall be no additional open heart surgery programs established unless; The service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 adult open heart surgery cases per year or 130 pediatric heart cases per year; and, The conditions specified in Sub- subparagraph 5.d., above, will be met by the proposed program. b. No additional open heart surgery programs shall be approved which would reduce the volume of existing open heart surgery facilities below 350 open heart procedures annually for adults and 130 pediatric heart procedures annually, 75 of which are open heart. The standard found at Subparagraph 11 of the Ruled which provides that there should be no additional open heart surgery units initiated in a service area unless each existing and approved unit is operating at and is expected to continue to operate at 350 adult open heart surgery cases per year or 130 pediatric open heart cases per year, is based upon a substantially similar standard enunciated in the National Guidelines published in 1978 and in effect at the time the Rule was initially promulgated. The National Guidelines were developed by the Federal Department of Health Education and Welfare (HEW) pursuant to an extensive process of public consultation, including receipt of recommendations and comments for Health Systems Agencies (HSAs), State Health Planning and Development Agencies (SHPDAs) Statewide Health Coordinating Councils, associations representing various health care providers, and the National Council on Health Planning and Development. The federal process of promulgation encompassed over two years of consultation, public notices, public meetings, and related activities. There were strong incentives to SHPDAs to develop local standards consistent with the National Guidelines and the National Guidelines contain a provision which permitted HSAs and SHPDAs pursuant to detailed local analyses, to deviate from the standards contained in the National Guidelines. The Florida Rule deviates from the National Guidelines in that it does not require facilities which offer cardiac catheterization services to also offer open heart surgery service. Florida's rationale supporting the 350 standard in its Rule is that of the National Guidelines which assumes that each facility can provide an average of seven operations a weeks a schedule HEW judged to be feasible in most institutions which provide open heart surgery services. As a matter of health planning policy, HEW established the 350 standard in an effort to prevent duplication of costly services which are not fully utilized, both as to facility resources and manpower. This goal is reiterated in the 1985 Florida State Health Plan. Reasonableness of the 350 case requirement is supported by testimony regarding the purposes behind the hours of operation standards portion of the Rule. See 10-5.011(1)(f)4.b. That subparagraph mandates that open heart surgery programs be available for procedures 8 hours per days 5 days per weeks for a total of 40 available hours of surgery per week, and capable of rapid mobilization of the surgical and medical support team for emergencies 24 hours per day, 7 days per week. Since it is estimated that each open heart procedure requires an average of 4 hours of operating room time, including cleanup, and operations go forward 50 weeks per year, then each program can, over time, attain the goal of 500 annual open heart operations which is set in Subsection 3.b. Considering both elective and unscheduled services, HRS arrived at a 75 percent of maximum as a reasonable utilization figure, and Petitioner has in no way refuted the reasonableness of these hours of operation requirements or of HRS' 75 percent figure for reasonable utilization. The 350 threshold figure is primarily intended to ensure an appropriate utilization level of every open heart surgery unit. In fact, the minimum quality standard is set forth in Subparagraph 5 of the Rule as "200" and is supported in reason and logic upon the facts set forth, infra. The 350 figure here is intended to result in greater efficiency which results in economic benefits to the hospital which may ultimately be passed on to patients. I accept Dr. Luft's expert opinion and analysis that the economic benefits of a 350 threshold are derived primarily from clinical economies of scale which result from improved proficiencies in the provision of service rather than solely in the classic economy of scale of a greater division of fixed costs. One clinical economy of scale demonstrated by Dr. Luft is that shorter average lengths of hospital stay result from high volume facilities. The shorter lengths of stay translate into patient or third party payor dollars saved. Admittedly, the 350 standard also secondarily encompasses consideration of the relationship of the volume of open heart surgery services and patient mortality, thus peripherally impinging on the volume of a 200 minimum threshold for quality of care purposes. Except for one study by Dr. Sloan, the evidence consistently supports existence of a negative relationship between volume and outcome, e.g., facilities performing higher volumes of open heart surgery have lower mortality rates. Obvious empirical problems inherent in Dr. Sloan's study impair its credibility. In light of his deposition testimony concerning how his several studies were conducted and how empirical data was converted by him for use in those studies, and due to his superior education, training, and experience, I find more credible Dr. Luft's determination that hospitals which perform low volumes of open heart surgery, particularly with respect to coronary artery bypass graft surgery, have substantially higher mortality rates than hospitals performing higher volumes of such surgery. Moreover, those areas of analysis in which the opinions of these two health care economic experts, Dr. Luft and Dr. Sloan, are consistent with one another and with the other literature and experts in the field whom they each cite as accepted and relied upon by them, strongly suggest that Dr. Sloan's unusual conclusion that low volume hospitals more often fit his unique categorization of "low mortality" should not be relied upon for purposes of formulating, drafting, and promulgating standard rules. The 350 standard does not appear to have impeded either competition or quality of care. There is also no competent substantial evidence to establish that there are too few open heart surgery programs in Florida at this time. At present, no District/Service Area has fewer than two open heart surgery programs, and 8 of the 11 Districts have 3 or more programs. Although many individual programs fall below the 350 thresholds on average, open heart surgery programs in operation in Florida perform close to 350 cases per year apiece. Between 1985 and 1986 the percentage of Florida programs performing 350 or more cases annually climbed from 24 percent to 35 percent. Petitioner never directly attacked the 200 procedure standard for quality, however, some evidence was presented to show that a lesser figure could still uphold quality considerations. This evidence was neither substantial nor credible. In lieu of the 350 utilization threshold, a variety of possible optimal threshold numbers were suggested by Petitioner's expert witnesses, among them 130 (the same utilization figure as for pediatric cases), 150, and 200 (the same figure as presently used to insure adult quality of care). Even if the highest of these suggested figures were selected as a utilization standard, that is, 200 cases per year substituted for the 350 utilization standards a minimum additional 31 open heart surgery programs would be "needed" on a statewide basis. This would nearly double the current number. Assuming there would emerge therefrom a normal distribution of programs around the substituted 200 standard, there could be the result that half the State's programs would then be operating below 200 and half above 200, so that half the programs would operate below the 200 quality of care standard now in effect. Even assuming arguendo that Petitioner's expert, Mr. Schwartz, is correct that 72 percent of current programs meet or exceed the 200 procedure levels and that that 72 percent would remain constant, more than one quarter of the state's programs would be below the 200 quality of care level. This is clearly not a desirable health planning goal. Such a proliferation of straight numbers of programs would doubtless impact adversely on all existing approved providers' utilization, concomitantly forcing up individual consumer costs. The testimony is more credible that the improvement curve "flattens out" anywhere from 333 to 350, but even if one were to accept St. Mary's witnesses position that the improvement curve "bottoms out" (that is, utilization and quality optimums meet) at 200 open heart surgeries, there is evidence that there is still some minimal improvement in outcome (quality) in operations performed in hospitals exceeding the 200 figure. The 350 standard reduces the number of institutions over which a given number of procedures is spread and in general will result in higher volume per hospital, reducing the likelihood that outcomes would be worse than they might be otherwise. To the extent that witnesses support the position that the 350 figure is not reasonably or rationally related to the CON statutes, is arbitrary, or is unduly restrictive of the initiation of new open heart surgery programs, their testimony is unpersuasive in light of the foregoing determinations with regard to the hours of operation standards, the National Guidelines, and the statutory goal to avoid proliferation of such programs at the expense of efficiency, economy, and quality. Subsection 8 of the Rule provides as follows: Need Determination. The need for open heart surgery programs in a service area shall be determined by computing the projected number of open heart surgical procedures in the service area. The following formula shall be used in this determination: Where: N = Number of open heart procedures projected for Year X; U = Actual use rate (number of procedures per hundred thousand population) in the service area for the 12 month period beginning 14 months prior to the Letter of Intent deadline for the batching cycle. P = Projected population in the service area in Year X; and, Year X = The year in which the proposed open heart surgery program would initiate service, but not more than two years into the future. Subparagraph 8 of the Rule provides a formula by which numerical need for open heart surgery programs within a service area may be calculated. The use rate therein is based upon the number of procedures per 100,000 population in the District/Service Area for the 12 month period beginning 14 months prior to the letter of intent deadline for the applicant. If a District does not have 12 months' experience, the statewide use rate is used. This use rate is based upon the most recent utilization data available to HRS. The data necessary to calculate the use rate is accessible and available to HRS as set out supra. The base period employed in the calculation of the use rate is appropriate for use in the numerical need methodology. It provides the most current picture of utilization of open heart surgery services within each District/Service Area which the agency has been able to devise. The Rule's base period essentially provides what health planners describe as a "realistic" or "rolling" use rate. Such a component permits consideration of facility number increases and volume fluctuations within facilities within the District/Service Area. Increased number of facilities and volume increases and decreases within specific facilities are quickly reflected by such a use rate and may be quickly considered in projecting need for the future. Such reality based use rates are customarily employed by health planners in projecting need for new open heart surgery services. The use rate minimally approaches the differences in population utilization of open heart surgery facilities occurring across age differential groupings. Although there is some evidence that the use rate formula contained in the Rule is not optimal in providing accessibility where there occasionally is clustering of "aged aged" population centers or clustering of heart surgery optimal age groups, the evidence in favor of such a rolling use rate establishes that as a statewide rule component, it is reasonable, not arbitrary, and not capricious. No witness offered a more reasonable substitute base period and the agency is not required to promulgate an optimal one, merely a reasonable one. St. Mary's and BRCH's witnesses suggestion that the Rule is ambiguous for a discernible number need methodology is not substantiated by credible competent evidence, and is generally rejected. Ms. Stamm, testifying for Respondent, had trouble with applying basic arithmetic under stress but not with the methodology. Mr. Schwartz, on behalf of the Rule's opponents, had some difficulty in determining whether the 200 or 350 standard was the appropriate figure for need determination. No other witness experienced Mr. Schwartz' confusion. When called to work Subparagraph 8 calculations, all witnesses were in agreement as to the mechanics of the Rule. No witness, including those who attacked the Rule as facially inconsistent due to the Rule's use of undefined terms of "programs," "procedures," and "cases" and/or those who complained about difficulty of obtaining raw data for the base time period had any difficulty in applying the Rule's numerical need formula, and indeed, Mr. Rond testified that HRS' interpretation of the numerical need formula was the most straightforward interpretation (TR-115) and the way he would logically do it. (TR-98-100) Each witness who was asked to use the Rule's formula in order to determine numerical need, consistently offered the following approach: First Derive Nx, as provided in Subparagraph 8. (Nx is the number of open heart procedures projected for year X). Second: Divide Nx by 350 (from Subparagraph 11) to obtain the gross projected need. Third, subtract from the gross projected needs the numbers of existing and approved programs within the applicable district so as to obtain the net need. The Rule's provision for subtraction of approved as well as for subtraction of operating programs from gross need so as to determine net need was investigated and adopted in the rational approach to rule promulgation. This is an accepted health planning component utilized in numerous CON rules. For these reasons and for all of the foregoing reasons related to the value of retaining 350 utilization and 200 quality thresholds, this provision for subtracting approved facilities from the gross need is found neither arbitrary nor capricious. The evidence presented by St. Mary's and BRCH is insufficient to demonstrate that HRS has not, subject to evolving legal precedent, consistently used the formula's interpretation set forth in Finding of Fact 33, at least as modulated by universally accepted common mathematical principles such as rounding results to the nearest whole number and considering "not normal" circumstances in light of all statutory and rule criteria on a case by case basis. In any case, if the agency misapplies its own Rule, applicants have recourse to a Section 120.57 proceeding and misapplication is not cause to invalidate the rule applied. I also reject as speculative and not credible St. Mary's allegation that a "sinister" conspiracy among existing and authorized providers within a given District may unnaturally reduce a single facility below the 350 threshold in order to thwart new program applications. Mr. Rond and Mr. Schwartz also promoted the premise that this result might occur unintentionally as well. HRS has not interpreted the Rule in such a peculiar manner and has approved new programs in districts where individual existing programs were not performing at the 350 level. I specifically reject as not credible the testimony of the St. Mary's and BRCH's witnesses professing concern that persons applying the Rule may be confused about how to work the formula and whether or not the pediatric population within a service area or the 130 pediatric procedures are to be subtracted at some point. Px is defined in the Rule to mean "the projected population in the service area in Year X." The Rule's language is plain and unambiguous. Nothing in the language of the Rule suggests the "projected population in the service area" is intended to exclude the pediatric population. Petitioner offered evidence that in certain instances HRS has applied Px to include the pediatric population. This, on its face, is an erroneous application of the Rule but without more, will not invalidate the Rule itself. Should HRS fail to implement the Rule according to the plain meaning of its languages an affected party may contest that agency action in a Section 120.57 hearing. In the case of former HRS employees concerned with drafting, promulgating amending and/or applying the Rule over a period of several years, their credibility is impaired by their never attempting to correct the alleged flaws and by their expressed perception of the necessity for a rule challenge as a strategic litigation move in anticipation of St. Mary's contested CON action.
The Issue The issue in this case is whether either Mease Health Care (Mease) or St. Anthony's Hospital (St. Anthony's), or both, meet the statutory and rule criteria for a Certificate of Need (CON) to operate an open heart surgery program, and therefore, whether the Department of Health and Rehabilitative Services (Department) should approve either, or both, of their CON Applications.
Findings Of Fact The Parties Mease is a 278 bed, non-profit acute care hospital located in Dunedin, Florida, which is within the Department's Service District V. Its service area is mid-Pinellas through Pasco Counties, with mid-Pinellas to northern Pinellas being its primary service area. It has operated a special procedures room since before July 1, 1977, but that room is not a cardiac catheterization laboratory. The special procedures room has been staffed with persons trained in treating critical care patients, with special knowledge of cardiovascular medication and catheterization equipment. The catheterization team usually consists of a physician, special procedures nurse, and at least two dedicated radiographer technologists. Procedures performed at Mease in the special procedures room include renal arteriograms, pulmonary arteriograms which involve passing a catheter through a right side chamber of the heart into the lungs, as well as cerebral and femoral arteriograms. Pulmonary angiograms, right ventriculography and right atrial injections are all currently performed at Mease, with right catheterization procedures performed in the CCU and special procedures lab. The special procedures room is not used by radiologists or cardiologists at Mease to do any therapeutic or diagnostic studies of the left chambers of the heart, but rather these procedures are performed at Plant or Largo Medical Center in Clearwater. The Mease special procedures room does not have the more sophisticated equipment necessary to perform catheterizations in the left chambers of the heart, and such equipment would be found in a CCL. Mease does not have a CON for inpatient cardiac catheterization, but does have a separate pending application for such program. It has an outpatient cardiac catheterization lab which opened in April, 1989. Mease proposes to do angioplasties on an outpatient basis, which is contrary to the Department's Rule 10-5.011(1)(e)2b, which defines this as an inpatient procedure. Mease Clinic is located adjacent to Mease Hospital/Dunedin, and consists of approximately 90 physicians who have a contractual relation with Mease. Mease Clinic is a major source of referrals for Mease Hospital/Dunedin. St. Anthony's is a 434 bed, not-for-profit acute care hospital located in St. Petersburg, Florida, which is within the Department's Service District V. Its primary service area is southern Pinellas County, south of Ulmerton Road, where 80% of its patients reside. It provides a full range of services, including inpatient cardiac catheterization, with a CCL, coronary care unit, holter monitor service, and echocardiography laboratory. St. Anthony's presently has 5 cardiologists on staff, and will be adding 3 more. It offers a full array of diagnostic services including nuclear cardiography, basic electrocardiography, a magnetic resonance imaging unit. St. Anthony's is also the site of the Rogers Heart Foundation which performs research, education, and clinical diagnostic studies involving cardiovascular diseases. Plant is a 740 bed, general acute care, not-for-profit hospital located on an 11 building campus in Clearwater, Florida, approximately 3 to 4 miles south of Mease. It provides a wide range of services, including open heart surgery, medical/surgical with all subspecialties, obstetrics and psychiatry. It also operates a nursing home, ACLF, ambulatory surgery center, rehabilitation center, and arthritis center. Bayfront is a 518 bed, not-for-profit, full service acute care hospital located in St. Petersburg, Florida, adjacent to Children's. It is connected to Children's by an enclosed passageway, and operates a shared diagnostic, open heart surgery and cardiac catheterization program with Children's. The usual procedure under this shared progam is that adult patients requiring open heart surgery are admitted to Bayfront the day prior to surgery, and then are prepared and transported through the passageway by Bayfront personnel to Children's, where the actual surgery is performed. Normally the patient is kept overnight at Children's following surgery, and is then returned to Bayfront by Bayfront personnel to continue recovery, and eventual discharge. Children's is a 113 bed children's hospital located in St. Petersburg, Florida, approximately two miles from St. Anthony's. It is a full service tertiary facility, which serves as a referral center for children from throughout the State of Florida, and will have 6 operating rooms, 2 CCLs, and 13 ICU beds when construction underway is completed. It has an approved CON for 55 additional beds. Two of its operating rooms are used for open heart surgery. It has an open heart surgery program which has been in operation since the early 1970's, with 3 pediatric cardiologists and 12 to 15 adult cardiologists on staff. The Department is the state agency which is responsible for administering Sections 381.701 through 381.715, Florida Statutes, the "Health Facility and Services Development Act", under which applications for Certificates of Need (CON) are filed, reviewed, and either granted or denied by the Department. Currently, Children's/Bayfront, Plant, and Largo Medical Center, which is located near Ulmerton Road in central Pinellas County, have existing open heart surgery programs. There is an additional approved CON for an open heart surgery program at Bayonet Point Hospital in Pasco County. The 3 existing programs each have more than one operating room dedicated for open heart surgery. For every dedicated open heart surgery suite, approximately 500 open heart surgery cases can be performed per year, and thus, each of these existing programs in District V has the capacity to perform well over 500 cases each year. The Applications On or about September 28, 1988, Mease filed an application with the Department for a CON to implement an open heart surgery program at its hospital in Dunedin, Florida. This application was designated as CON Application Number 5679. The Department reviewed this application, and on October 13, 1988, forwarded an omissions letter to Mease. Mease responded to the omissions letter on November 14, 1988, and on November 15, 1988 the Department deemed its application complete. Thereafter, the Department reviewed and considered all material received from the applicant, and issued its State Agency Action Report (SAAR) on or about January 12, 1989, noticing its intent to deny CON 5679. Mease timely filed a petition for formal hearing to challenge the Department's notice of intent to deny this CON, and Plant timely intervened in opposition to this application. On or about September 28 1988, St. Anthony's filed an application with the Department for a CON to implement an open heart surgery program at its hospital in St. Petersburg, Florida. This application was designated as CON Application Number 5678. The Department reviewed this application, and on October 13, 1988, forwarded an omissions letter to St. Anthony's. St. Anthony's responded to the omissions letter on November 11, 1988, and the Department deemed its application complete. Thereafter, the Department reviewed and considered all materials received from the applicant, and issued its SAAR on or about January 12, 1989, noticing its intent to deny CON 5678. St. Anthony's timely filed a petition for formal hearing to challenge the Department's notice of intent to deny this CON, and both Bayfront and Children's timely intervened in opposition to this application. On or about May 26, 1989, Mease filed certain revisions to its CON application, purportedly by agreement of counsel. However, these revisions were not filed with, or reviewed by, the Department in the preparation of its SAAR. The applicants and intervenors in this proceeding are all located in District V, which is composed of Pinellas and Pasco Counties. There are no subdistricts within District V for purposes of open heart surgery programs, and the Department's numeric need methodology for such programs. The open heart surgery and population growth rates for northern Pinellas and Pasco Counties exceed that of southern Pinellas County, south of Ulmerton Road. However, the total population of south Pinellas exceeds that of northern Pinellas. Utilization rates are also lower in south Pinellas than elsewhere in District V. Stipulations The parties stipulated that: The licensure and accreditation of each hospital in this proceeding is not at issue and does not have to be proven; The equipment proposed by Mease and St. Anthony's is adequate, and the costs projected for that equipment are reasonable, as well as the costs associated with architectural design and construction; St. Anthony's and Mease have the ability to finance the proposed project costs; St. Anthony's, Bayfront and Children's have stipulated to each other's standing in Case Number 89-0727; Plant has stipulated that Mease renders quality care in its existing programs; and The term "case" means "admissions" or "discharges", and there can be multiple procedures performed in each case. State Health Plan Objective 4.2 of the State Health Plan applicable to this application is to "maintain an average of 350 open heart surgery procedures per program in each district through 1990." (Emphasis Supplied.) The goal set forth in the State Plan relative to open heart surgery programs is to ensure the appropriate availability of such services at reasonable costs. These applications are not consistent with Objective 4.2. If these application were to be approved, there would be 6 (3 existing and 3 approved) programs in the District. The number of procedures projected for 1990 is 1271, and if this is divided by 6 programs, the result is an average of only 212 procedures per program. If only one of these two application were to be approved, and the number of procedures projected for 1990 were to be divided by 5 instead of 6, the result of 254 would still fall below the 350 standard. Approval of either of these applications will also significantly and adversely impact the ability of the already approved program in the District, located at Bayonet Point Hospital in Pasco County, to achieve an acceptable level of service. In the State Health Plan narrative, it is recognized that "quality of patient care is a primary concern in open heart surgery programs due to the potential consequences to the patient of poorly trained and/or skilled staff." In order to ensure quality, and in recognition of the relationship between the volume of open heart surgery procedures and quality, the State Plan references the Department's requirement, set forth by rule, that a minimum of 200 adult procedures be performed within 3 years of initiation of an open heart program. The narrative also notes that a broad range of services must be provided to fulfill the requirements of an open heart surgery program. Both of these applications are partially consistent with these narrative statements in the State Health Plan since they have a record of providing quality care, and offering a complete range of services within departments at these hospitals, where a broad range of diagnostic techniques and expertise are available. However, it was not established that a minimum of 200 adult open heart surgical procedures would be performed at either Mease or St. Anthony's within three years of initiation of this program. Local Health Plan The applicable portions of the District V Health Plan recommend that in a comparative review of open heart surgery applications, preference should be given to those hospitals with a documented record as a major referral center for open heart surgery, and which serve the entire community regardless of ability to pay, using the proportion of Medicaid patient days of the planning area total as a measure. The Local Plan also recommends that future expansion of open heart surgical programs occur so as to serve population areas which will generate a minimum of 350 open heart operations annually. Finally, the Local Plan states that applicants should be able to justify the projected minimum number of 200 procedures stated in the Department's rule within three years of the beginning of service, there should be a numeric need shown in accordance with the Department's numeric need methodology for open heart surgery, existing programs should be performing the number of procedures required in the Department's methodology, and priority should be given to applicants in areas which do not have existing or approved programs. District V is not divided into subdistricts for purposes of determining the need for additional open heart surgery programs. Neither of the applicants in this case are major referral centers, and neither provides a significant volume of services to Medicaid or chronically underserved groups, as discussed further below, although they have provided services to those who are unable to pay. According to the Department's numeric need methodology, there is no need for any additional open heart surgery programs in District V. There are existing open heart programs in both north and south Pinellas County, the primary service areas of each of these applicants. The Department's Numeric Need Methodology and the "350 Standard" Rule 10-5.011(1)(f)8, Florida Administrative Code, sets forth the Department's methodology for calculating the numeric need for additional open heart surgery programs. It provides a formula by which the number of open heart procedures for the horizon year, in this case 1990, are to be estimated. (See Finding of Fact 19 for an explanation of the interchangeable use of the terms "procedures" and "cases".) Pursuant to the formula, there are projected to be 1271 open heart surgery procedures performed in 1990 in District V. This number of projected procedures is then divided by 350 procedures in order to determine the number of programs which will be needed. See Rule 10-5.011(1)(f)11b. Using this methodology, the Department has identified the need for 3.6 (rounded to 4) programs in the District in the horizon year. Since there are currently 3 existing (Plant, Bayfront/Children's and Largo Medical Center) and 1 approved program (Bayonet Point Hospital) in District V, the Department has concluded that there is no projected numeric need for either of these additional programs in 1990. The Department will not normally approve a CON for a new open heart surgery program unless a numeric need is projected under its methodology. In performing the calculations under its numeric need methodology, the Department correctly determined that the actual use rate in District V was 110.35 procedures per 100,000 population. This actual use rate properly does not adjust for outmigration of residents of District V to facilities outside the District. It has been the consistent policy of the Department in determining actual use rates to consider only the total number of procedures performed at facilities within the District since the numeric need methodology calculates the need for additional programs within the same District. As long as there are sufficient resources to serve the volume of patients needing service in a given District, it does not matter where those patients reside. Patients choose to go to another District for open heart services for many reasons other than a lack of resources within their own District, such as physician preference. Therefore, it cannot be concluded that all patients who outmigrate for one reason or another will return to their own District for services if an additional program is approved. For this reason, as well as the double counting of the same patients which would result if they were counted in determining the actual use rate in both the District in which they reside, and in the District to which they outmigrated for service, the Department's interpreptation and policy is reasonable. For purposes of applying the Department's numeric need methodology rule, the words "cases", "procedures", and "admissions" are used interchangeably. This is the result of the historical development of the rule, which preceded the development and implementation of DRG's precisely defining "procedures". Thus, while the rule states that need for open heart surgery programs shall be determined by computing the projected number of open heart surgical "procedures", the Department has consistently interpreted this rule to mean the number of "cases", and used the number of "cases" in performing the calculations under the methodology. Hospitals reporting data to local health councils generally report the number of cases or discharges, and most health planners similarly use the number of patients or discharges when calculating the need for a new program. Through the testimony of Michael L. Schwartz, an expert in health care planning, Mease erroneously attempted to inflate the need projected under the rule by using "procedures" instead of "cases" in its calculations. It applied the multiplier of 1.77 or 1.44 to reported "cases", since this represents an estimate of the number of procedures per case, and thus incorrectly projected a need for an additional program. The Mease methodology is in error because it is inconsistent with the Department's reasonable, historical interpretation and application of this rule, as well as the manner by which data is reported under the rule to local health councils. Recognizing that the numeric need methodology does not project the need for any additional programs, the applicants herein both seek to justify the approval of their applications under a "not normal" rationale, which relies primarily upon outmigration of patients from District V to Hillsborough County in District VI. In fact, outmigration is the only "not normal" circumstance raised in the Mease application. Therefore, arguments at hearing that the existence of the Mease Clinic should also constitute a "not normal" circumstance are rejected. The data demonstrates insignificant outmigration from Pinellas County. From July 1987 through June 1988, only 32 patients (5.9%) outmigrated from north Pinellas where Mease is located and only 36 (6.8%) outmigrated from south Pinellas where St. Anthony's is located. The main outmigration was from Pasco County in which approximately 85.5% of Pasco residents receiving open heart surgery (488 of 571) outmigrated from District V. However, there is now a CON approved program in Pasco County which will be located at Bayonet Point Hospital which will be available to serve Pasco residents who have been outmigrating to District VI. There is a direct relationship between the volume of open heart surgery procedures performed at a facility and the quality of care provided at such facility, with lower mortality rates generally at hospitals with higher volumes than those with low volumes. Therefore, in addition to its numeric need calculation, the Department has also developed a "350 Standard" to address patient safety and quality of care concerns by ensuring that each existing and approved open heart surgery program achieves a volume sufficient to assure quality and efficiency prior to approval of a new program. Rule 10- 5.011(1)(f)11aI, Florida Administrative Code, prohibits the establishment of new open heart surgery programs unless: . . . the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 adult open heart cases per year. . . Bayfront/Children's urges an interpretation and application of the 350 Standard in a manner which would require each existing and approved program to actually operate at the level of 350 cases per year. Since approved programs are not yet operational, and therefore cannot operate at the 350 level, they argue that the intent of this Standard, as set forth in the above-cited rule, is to preclude the approval of any additional programs while there are approved programs, or existing programs which are not meeting the 350 Standard. To the contrary, the Department and the applicants urge that the 350 Standard be applied by averaging the actual number of cases at existing programs, and the number of cases which are reasonably projected to be performed at approved programs. Under this interpretation, as long as the average between cases which are performed at existing, and which are reasonably projected to be performed at approved programs exceeds 350, then the further approval of an additional program is not prohibited. Having considered the testimony and evidence presented by the parties, and in particular the testimony of Sharon Gordon-Girven, who was accepted as an expert in health planning, which is found to be more credible, consistent, and reasonable on this point than the testimony of Michael C. Carroll, who was accepted as an expert in health planning and hospital administration, it is found that the Department's interpretation and application of the 350 Standard is reasonable and consistent with the terms of Rule 10-5.011(1)(f)11aI. The Department has consistently applied this 350 Standard since this rule's adoption by averaging caseloads at existing programs and reasonably projected caseloads for approved programs. To interpret this Standard as urged by Bayfront/Children's would impose a moratorium on new open heart surgery programs while there is an already approved, but not operational, program in a District, or while a newly operational program has not yet attained the 350 Standard. There is no basis for this prohibitory interpretation which would not only reduce competition, but would also be inconsistent with sound health planning and the State Health Plan Objective 4.2, as discussed above. Quality of Care Both Mease and St. Anthony's are accredited by the Joint Commission on Accreditation of Health Care Facilities and have a record of providing quality care in their existing programs. On average, hospitals performing greater than 200 open heart procedures per year have superior surgical outcomes than hospitals doing less than 200 procedures. Mortality rates are significantly lower at hospitals performing more than 200 procedures annually than at those performing less. It was established that there is a direct relationship between volume of open heart surgical procedures and quality of care at facilities with open heart surgery programs. Therefore, the existence of more open heart programs than are needed in an area may result in some existing programs not achieving sufficient volume to assure patient safety and quality of care. Rule 10-5.011(1)(f)5d, Florida Administrative Code, was adopted by the Department in order to set forth the minimum volume deemed necessary to assure quality of care, and provides, in part: There shall be a minimum of 200 adult open heart procedures performed annually, within 3 years after initiation of service, in any institution in which open heart surgery is performed for adults. Although the applicants urge that they will be able to meet this threshold level within three years, they failed to establish by competent substantial evidence that they would actually attract the patients necessary to perform either the number of open heart procedures projected in their applications, or this minimum number of 200 procedures required by the Department to assure quality of care in its third year of operation, given the current pattern of physician referrals in the area, their market share in relation to those of existing programs, and actual utilization levels for the existing District V programs. Without the assurance of sufficient volume to meet the 200 procedure threshold established by the Department by rule, the validity of which is not at issue in this case, the applicants have failed to show that they will be able to achieve and maintain a patient volume in their proposed program which will assure quality of care in their proposed open heart surgery program. St. Anthony's sought to question the quality of care provided at the Bayfront/Children's program by citing an 8% mortality rate in 1987-88, and a 5.5% rate in 1988-89, while 3% is the national standard. However, mortality rates are only one indicator of quality, and a significant number of these cases at Bayfront/Children's involved complex open heart surgery on patients whose mean age was significantly higher than would be expected in a normal case mix, which presents a greater risk potential than less complex surgery on a younger case mix. In any event, this issue was not clearly raised in St. Anthony's application. Further, the evidence that was received, including testimony of physicians on staff at St. Anthony's and Children's/Bayfront, establishes that the quality of care at the Children's program is excellent, and that scheduling problems relating to availability of operating rooms are being resolved. It was not shown that there is any adverse impact on quality from having to move patients between Bayfront and Children's for open heart surgery. The fact that Mease does not have a CON for an inpatient cardiac catheterization program adversely affects the potential quality of care of any open heart surgery program at its facility since the medically preferred practice when performing such surgery is to have inpatient cardiac catheterization available. Open heart surgery programs do not, and should not, operate without this inpatient cardiac catheterization capability. Availability and Access While the addition of these two new programs would obviously increase the availability of services in the District, open heart surgery services are already reasonably available in District V. St. Anthony's is only two miles from the Bayfront/Children's program in St. Petersburg, and Mease is located in Dunedin, approximately 3 to 4 miles north of Plant in Clearwater. The two hour travel time standard is already being met in District V, and geographic accessibility will not be appreciably or significantly increased by these proposals. There is excess capacity in existing and approved open heart surgery programs in District V during most of the year, including at the Bayfront/Children's and Plant programs. Therefore, there is ready access to, and availability of open heart surgery services to patients in the District. The applicants did not establish that approval of their applications would enhance access to open heart surgery services for the medically indigent. Despite the assertion in these applications that each program would be available to the underserved, there is no definite commitment to serve charity care patients as a percentage of total patient days or of total revenue. Bayfront and Children's exceed St. Anthony's in their commitment to indigent, charity care. As a percentage of total patient days in 1987, Medicaid patients represented 2.3% of St. Anthony's, and 2.1% of Mease's total patient days, while for Children's, Medicaid patients in 1987 represented 34.2%, and for Bayfront, they represented 8.9% of total patient days. While unstable patients who have to be transferred from one hospital to another face increased risks, it was not shown that transfers from Mease to Plant, or from St. Anthony's to the Bayfront/Children's program have actually jeopardized the safety of patients or resulted in a reduction in the quality of care received by patients. Transfer delays are exacerbated by seasonal increases in population in District V, but there continues to be a reasonable likelihood that patient transfers can be accommodated, even during seasonal population increases, without adverse impacts to patient care. However, a large majority of open heart surgery cases are non-emergency that can be scheduled for surgery after diagnosis without any compromise in patient care. Emergency patients can be given priority, and there are sufficient available beds to accommodate emergency patients, regardless of seasonal delays, and such seasonal delays do not establish that there is a lack of available beds in District V which would require the approval of either of these applications. Alternatives Considered The applicants did not fully explore alternatives, including less costly alternatives, to a new program at their facility, such as a joint or shared program with an existing provider. This would have been particularly relevant to these applications since District V already has a quality joint program at Bayfront/Children's which is operating successfully in the community. A less costly alternative to approval of either, or both, of these applications would be greater utilization of existing programs, especially where excess capacity exists, such as at the Bayfront/Children's and Plant programs, and in view of there being an already approved program in District V at Bayonet Point. Personnel Availability and Costs There has been a long-term shortage of nurses, particularly in intensive care and open heart surgery, and this shortage is present in District V not merely for nursing staff, but also for technical support staff, and is particularly acute in operating room and critical care personnel. It is not always possible to fill open heart surgery or critical care nursing positions with trained personnel. At hearing, St. Anthony's proposed a joint training program with St. Joseph's Hospital in Tampa for open heart personnel. However, this was not explicitly raised in the St. Anthony application, and therefore, it cannot be considered. The applicants will compete with existing providers in attracting open heart surgery nursing and technical staff. The implementation of these new programs would have an adverse impact on the ability of existing and approved programs to attract and retain trained open heart surgery nursing and technical staff, and can reasonably be expected to increase personnel costs for these providers. The salaries and benefits identified in these applications are generally reasonable and complete. However, Mease's estimate of the number of additional nursing positions, or FTE, which would be required throughout the hospital to accommodate the workload resulting from an open heart surgery program is incomplete and inadequate, and St. Anthony's failed to fully consider the need for additional personnel for its proposed open heart step-down unit, angioplasty recovery, open heart "stat" lab, and resperator machine operators. Financial Feasibility In their applications, Mease has projected 200 open heart surgery cases, and St. Anthony's has projected 150 open heart surgery cases, in their first year of operation; Mease has projected 240 cases and St. Anthony's projected 200 cases in their second year; St. Anthony's projected 250 cases in their third year of operation, but Mease did not include a third year projection. However, it is specifically found that these projections are not reasonable, based upon the testimony and evidence received, as well as the results of the Department's numeric need methodology calculations, performed pursuant to Rule 10-5.011(1)(f)8, the validity of which is not at issue in these proceedings. A basic assumption used by Mease in the preparation of its pro forma is flawed. The utilization projections which drive the necessary calculations in the pro forma are based upon a percentage of patients who have cardiac catheterizations who subsequently have to have open heart surgery. That percentage is 25%, but is based upon experience in which the facility at which these patients received this treatment had both inpatient cardiac catheterization and open heart surgery programs. Mease does not have inpatient cardiac catheterization, and therefore, there is a reasonable likelihood that the percentage of cardiac catheterization patients who would choose to be transferred from another facility, such as Plant, to Mease for open heart surgery would be substantially less than 25%, thereby reducing Mease's projected utilization. For example, it was shown that 75% of patients who receive inpatient cardiac catheterization remain at the same hospital for open heart surgery, if that becomes necessary and if that hospital has both programs. The pro forma which has been filed by St. Anthony's includes revenues that St. Anthony's is already receiving for treatment of patients who are subsequently transferred to Bayfront/Children's for open heart surgery. This amounts to approximately $11,000 per admission which St. Anthony's is already receiving and which, therefore, should not have been shown on its pro forma of revenues to be expected from a new open heart surgery program. The inclusion of this amount results in inflating St. Anthony's revenue projections. Additionally, St. Anthony's has incorrectly estimated its Medicare utilization at 65%, while it should have been estimated at 80% of patient mix. This error also has the effect of inflating expected revenues, and placing unjustified greater significance than there should be on its proposed fixed price discount, which is discussed later, and which applies only to non-Medicare, non-Medicaid, non-charity cases. For the July 1990, planning horizon in District V, the Department's numeric need methodology projects that there will be 1271 open heart surgery procedures. With referral patterns in place and existing providers with operational and well regarded programs, it is unlikely that either applicant would have an automatic, equal share of the District's pool of open heart patients, or even that they would perform the number of procedures projected in their pro forma for their first and second years of operation. In fact, the 3 existing providers in District V performed 1215 procedures (355 at Children's, 416 at Plant, and 444 at Largo Medical Center) between July 1987 and June 1988, leaving fewer than 56 procedures projected through the Department's numeric need methodology for the one already approved program and these applicants, if they were to be approved. It defies logic and reason to argue that the applicants will achieve their projected caseloads, given the existing levels of service at existing programs in District V, the fact there is an additional program that has already been approved, and the fact that the Department's numeric need methodology projects 1271 procedures in 1990. Since the applicants base their assessment of financial feasibility upon their unsubstantiated, inflated projections, and since the applicants have not established the reasonableness of these projections, the long-term financial feasibility of these proposed new programs has not been shown. Further, the applicants have also failed to establish that they can reasonably be expected to achieve the level of 200 procedures in their third year, and therefore, they have also failed to show that they can achieve that minimum level which the Department, by rule, requires to ensure quality of care. In other respects, the assumptions used by the applicants in their pro forma are reasonable, including their inflation factor for income, bad debt, expenses, and depreciation. Effect on Competition and Costs It cannot be determined whether there will be a significant difference between the charges proposed by each of these applicants and the actual charges at existing providers. Actual charges are dependent on case mix, Medicare percentage, payor mix and illness severity. Meaningful charge comparisons can only be made for hospitals in the same Hospital Cost Containment Board (HCCB) peer grouping based on case mix, Medicare percentage and location, and the parties in this case are in various groupings. This finding is based on the testimony of Margo Kelly, who was accepted as an expert in health care planning and finance, and Larry Ward, an expert in hospital finance and financial feasibility, and applies to both overall hospital charges and charges for specific services. There are simply too many variables to make any meaningful comparison of charges between hospitals which are in different HCCB peer groupings. A unique aspect of the St. Anthony's application is that it has proposed a fixed fee of $32,000, adjusted 6% annually for inflation, for open heart surgery for the first 3 years of the program, if approved. However, this factor is not as significant as it may appear from St. Anthony's pro forma since St. Anthony's has erroneously underestimated its Medicare mix at 65% instead of 80%, based upon actual Medicare percentages at existing programs, and thus, the mix of patients to whom this fixed fee would apply was overestimated by 15%. The fixed fee program is applicable to such a limited number of patients that the program is insignificant as a factor upon which approval of this application should be based. Additionally, based on the testimony of Sharon Gordon-Girven, it is found that while a fixed fee may be an attractive aspect of a CON application, it is not a "not normal" circumstance which can be used to approve an application notwithstanding a showing of no numeric need. It has not been shown whether there would be an appreciable positive impact on costs in the health care community if either, or both, of these applications were approved. When health care services are duplicated and associated costs are spread over the same number of patients, charges for those patients tend to increase. The evidence showns there is virtually no price competition for open heart surgery services. Mease has underprojected charges for its open heart surgery program by estimating an average length of stay of only 10 days instead of 13, which is the average at other area hospitals, and also by failing to include cardiac catherization charges, which should be included for those patients on whom both a catheterization and open heart surgerical procedure are performed in the same episode of care. As previously discussed, there would be greater competition among existing and approved programs in District V for trained open heart surgery and critical care nurses, which are in short supply, and it can reasonably be expected that greater competition for trained personnel who are in short supply will eventually result in higher salaries and health care costs. Impact on Existing and Approved Programs As discussed above, approval of these applications will adversely affect the ability of existing providers to attract and retain trained open heart surgery and critical care RNs due to the already existing shortage of personnel to fill these positions, and the fact that one already approved program would become operational prior to either of these programs, if they were to be approved. The proposed primary service area for Mease overlaps with the primary service area of Plant, and the primary service area of St. Anthony's overlaps with the primary service area of the Bayfront/Children's program. Therefore, these facilities are competing for the same open heart surgery patients. Patients referred to Plant by Mease physicians for open heart surgery account for approximately 30% of Plant's current total caseload, and if these patients are lost, the financial impact on Plant would be approximately $4.5 to $5 million in lost revenues. The same surgical group that does 90% of the surgeries at Plant is expected to do open heart surgeries at Mease, if the Mease CON is approved. The viability of the Bayfront/Children's program might be endangered, financially and programatically, if the St. Anthony's application is approved. From July 1987, through June 1988, 39% of the adult open heart surgical procedures performed at Bayfront/Children's were referred from St. Anthony's cathing cardiologists. A substantial number of these patients can be expected to be lost if the St. Anthony's program is approved, and this can reasonably be expected to significantly decrease utilization of the Bayfront/Children's program, with resulting loss in revenues. Bayfront reasonably estimates a resulting loss of $400,000 in its net income. It was also shown that Bayfront is already incurring a net loss in income from its open heart surgery program, which would only be exacerbated by the loss of a substantial number of patients to St. Anthony's. Comparision of Applicants While St. Anthony's does have an existing inpatient cardiac catheterization program, Mease does not. The Mease outpatient cardiac cath lab only opened in April, 1989, and therefore, its experience to date with outpatient cardiac catheterization is minimal. Mease proposes to do angioplasties in its outpatient cardiac cath lab, which is specifically prohibited by Departmental Rule 10-5.011(1)(e)2b, and is an unacceptable medical practice. Thus, while St. Anthony's patients would be able to receive complete and continuous care at its facility, Mease patients would still have to be transferred to another hospital for inpatient cardiac caths and angioplasties. There is already an approved open heart surgery program in the northern part of District V which will be located at Bayonet Point, and this new program will address the outmigration circumstance which has been occuring from Pasco County to Hillsborough County, upon which Mease has based its "not normal" argument in support of its application. Although population growth is greater in northern Pinellas than in south Pinellas, the total population of south Pinellas remains larger, and thus, there remains a larger population base for open heart surgery in south Pinellas than in north Pinellas. There is only one open heart surgery program in south Pinellas (Bayfront/Children's) while there are two existing programs in north Pinellas (Largo and Plant). Mease has only 5 operating rooms, while St. Anthony's has 12, and total beds at St. Anthony's exceed beds at Mease by 434 to 278. Of the two applications at issue on this proceeding, St. Anthony's is the superior application for an additional open heart surgery program in District V, if one were to be approved.
Recommendation Based upon the foregoing, it is recommended that the Department enter a Final Order which denies the application of Mease for CON 5679, and of St. Anthony's for CON 5678. DONE AND ENTERED this 29th day of November, 1989 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1989. APPENDIX Rulings on Proposed Findings of Fact filed by Mease: Adopted in Finding 1. Adopted in Finding 8. Adopted in Finding 1. Rejected as irrelevant and not based on competent substantial evidence. 5-6. Adopted in Finding 1. 7-8. Rejected as immaterial. Rejected in Finding 31, and otherwise as immaterial. Rejected as immaterial. Rejected in Findings 34, 35 and otherwise as immaterial. Adopted in Finding 24. Rejected in Findings 31, 46. Rejected as irrelevant and immaterial. 15-16. Rejected in Finding 43, and otherwise as immaterial. 17-18. Adopted in Finding 1, but otherwise Rejected as unnecessary, and not based on competent substantial evidence. Rejected in Finding 11. Adopted in Finding 7, but otherwise Rejected as unnecessary. Rejected in Findings 11, 49. rejected as immaterial and not based on competent substantial evidence. Rejected in Finding 40. 24-33. Rejected in Finding 38, and otherwise as immaterial and not based on competent substantial evidence. 34-35. Rejected as irrelevant and immaterial. 36. Adopted in Findings 49, 50. 37-38. Rejected in Findings 21, 26. 39-43. Rejected in Finding 17, and otherwise as irrelevant and immaterial. Adopted in Finding 38. Rejected as irrelevant and immaterial. 46-48. Rejected in Finding 32, and otherwise as irrelevant. 49. Rejected in Finding 30. 50-51. Rejected as immaterial and unnecessary. Rejected in Findings 45, 47. Rejected as immaterial. Adopted and Rejected in part in Finding 46. Rejected as immaterial and irrelevant. Adopted in Finding 40. Rejected as unnecessary. Rejected in Findings 7, 30 and otherwise as speculative. 59-62. Adopted in Finding 11, but otherwise Rejected as unnecessary and immaterial. 63-64. Rejected as not based on competent substantial evidence. Adopted in Finding 2. Adopted in Finding 11. Rejected as unnecessary. Adopted in Finding 30. Rejected as immaterial and unnecessary. Adopted and Rejected in part in Finding 51. Adopted in Findings 15, 17. Rejected in Finding 44, and otherwise as immaterial. Rejected in Finding 31. 74-80. Adopted and Rejected, in part, in Findings 12, 19. 81-85. Adopted and Rejected, in part, in Finding 20 and otherwise Rejected as immaterial. Rejected as not based on competent substantial evidence. Rejected in Finding 50, and otherwise as irrelevant. 88-89. Rejected as immaterial and irrelevant. Rejected in Findings 7, 30, and otherwise as unnecessary. Rejected as irrelevant and immaterial. Rejected as immaterial. Rejected in Findings 7, 30, and otherwise as unnecessary. Rejected in Findings 27, 49. Rejected in Findings 1, 29, and otherwise as immaterial. Rejected as unnecessary and immaterial. Adopted in Finding 24, but otherwise Rejected in Findings 1, 29. Rejected in Findings 38, 41. 99-100. Rejected in Finding 46, and otherwise as immaterial. Rejected in Finding 43. Rejected in Finding 45. Rejected in Finding 46. 104-105 Rejected in Findings 37, 38, 41. 106-107 Rejected in Findings 34-36. Rejected in Finding 38. Adopted, in part, in Finding 12. Rulings on Proposed Findings of Fact filed by St. Anthony's: Rejected as unnecessary. Adopted in Findings 12, 24. Adopted in Finding 12. 4-6. Adopted in Finding 9. Adopted in Findings 8, 9. Rejected as immaterial. Adopted in Findings 20, 44. 10-13. Adopted in Finding 2, but otherwise Rejected as unnecessary and cumulative. 14-15. Rejected as immaterial and unnecessary. Rejected in Finding 31. Adopted in Finding 7. 18-20. Adopted in Finding 40, but otherwise Rejected as 21-22. Adopted in Findings 7, 20. Adopted in Finding 2. Rejected in Finding 11. Rejected in Finding 11, and otherwise as immaterial. 26-27. Adopted and Rejected, in part, in Finding 11, and otherwise Rejected as immaterial. Adopted in Findings 4, 5. Rejected as irrelevant and immaterial. Rejected as irrelevant and not based on competent substantial evidence. Adopted in Finding 40. Rejected in Finding 20. Rejected in Finding 18, and otherwise as irrelevant. 34-36. Rejected in Findings 11, 20 and otherwise as irrelevant. 37-42. Rejected in Findings 28, 30, 31 and otherwise as not based on competent substantial evidence. 43-47. Rejected in Finding 28. Rejected as not based on competent substantial evidence. Adopted in Finding 17. Adopted in Findings 18, 20. Rejected in Finding 18. Rejected in Findings 18, 20. Adopted in Finding 40. Adopted in Finding 20. Rejected in Findings 13, 14, 16. Rejected in Findings 16, 27, 30, 31. Rejected as immaterial, unnecessary and cumulative. Adopted in Finding 11, but otherwise Rejected as irrelevant. Rejected in Findings 14, 30. Rejected in Findings 17, 18, 20. Rejected as immaterial and irrelevant. Rejected in Findings 27, 37, 40, 41. Rejected in Findings 11, 20 and otherwise as irrelevant and immaterial. 64-66. Rejected in Finding 17, and otherwise as irrelevant and not based on competent substantial evidence. 67-68. Adopted in Finding 24, but Rejected in Finding 27. Rejected in Finding 41. Adopted in Finding 36. 71-80. Adopted in Finding 44, but Rejected in Findings 43, 45 and otherwise as not based on competent substantial evidence. 81-85. Adopted in Finding 36, but Rejected in Findings 34, 35. 86. Adopted in Finding 7, but otherwise Rejected as unclear. 87-90. Rejected in Findings 17, 47-49, 51. Rejected in Findings 27, 51. Rejected in Findings 34, 35, 48. Adopted in Findings 1, 52. 94-99. Adopted in Finding 52, but otherwise Rejected as immaterial and not based on competent substantial evidence. Rulings on Proposed Findings of Fact filed by the Department: Adopted in Findings 12, 24. Adopted in Findings 8, 9. 3-6. Adopted in Finding 2. Rejected as unnecessary and immaterial. Rejected in Finding 31, and otherwise as not based on competent substantial evidence. 9-10. Adopted in Finding 5, but otherwise Rejected as immaterial and unnecessary. Adopted in Finding 31. 12-15. Adopted in Finding 4, but otherwise Rejected as immaterial and unnecessary. Adopted in Finding 28. Rejected in Finding 43. 18-19. Adopted in Finding 28. Adopted in Findings 7, 20, 52, but otherwise Rejected as immaterial and unnecessary. Adopted in Finding 1. Adopted in Finding 19. Adopted in Finding 7. Adopted in Finding 3, but otherwise Rejected as immaterial and unnecessary. Adopted in Findings 7, 30. Adopted in Finding 45. Adopted in Finding 50. Adopted in Finding 20, but otherwise Rejected as unnessary. Adopted in Findings 13, 30, 35. Adopted in Finding 40. Adopted in Finding 17. Adopted in Finding 18. Rejected as unnecessary and cumulative. Adopted in Finding 21, but otherwise Rejected as unnecessary and cumulative. Adopted in Finding 17. Adopted in Finding 18. 37-38. Adopted in Finding 20. 39. Adopted in Findings 34, 35. 40-41. Adopted in Finding 30. 42. Adopted in Findings 45, 47-51. 43-44. Rejected as unnecessary and cumulative. Rulings on Proposed Findings of Fact filed by Plant: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 1. Adopted in Findings 16, 17. Adopted in Finding 11. Adopted in Findings 7, 30. Rejected as immaterial and unnecessary. Adopted in Finding 17. 11-12. Adopted in Finding 19. 13-14. Adotped in Findings 19, 20. 15-16. Adopted in Finding 1, but otherwise Rejected as immaterial and unnecessary. 17. Rejected as unnecessary. 18-19. Adopted in Findings 7, 30. Adopted in Finding 36. Adopted in Findings 35, 47, but otherwise Rejected as unnecessary. Adopted in Findings 25, 27 but otherwise Rejected as immaterial and unnecessary. Adopted in Finding 34. Adopted in Findings 37, 38. 25-26. Adopted in Finding 46, but otherwise Rejected as unnecessary. 27. Rejected in Finding 42. 28-30. Adopted in Findings 45, 50. Ruling on Proposed Findings of Fact filed by Bayfront/Children's: Adopted in Finding 2. Adopted in Finding 9. Adopted in Finding 5. Rejected as unnecessary and immaterial. Adopted in Finding 5. Adopted in Finding 31, but otherwise Rejected as cumulative. Adopted in Finding 4. Rejected as immaterial and cumulative. Adopted in Findings 4, 49. 10-13. Adopted in Finding 4, but otherwise Rejected as unnecessary and cumulative. 14-17. Adopted in Finding 28, but otherwise Rejected as unnecessary and cumulative. 18-19. Rejected as immaterial and unnecessary. 20-28. Adopted in Findings 39, 44, but otherwise Rejected in Finding 43 and as immaterial and unnecessary. Adopted in Finding 7, but otherwise Rejected as unnecessary and immaterial. Adopted in Findings 11, 49, but otherwise Rejected as unnecessary. Adopted in Findings 7, 30, 40. Rejected as unnecessary and immaterial. Adopted in Finding 17. Adopted in Finding 18. Rejected as cumulative. Adopted in Finding 21, but otherwise Rejected as unnecessary. Adopted in Finding 17. Adopted in Findings 49, 51. 39-40. Adopted in Finding 18. 41-44. Adopted in Finding 20, but otherwise Rejected as unnecessary and cumulative. Adopted in Finding 30, but otherwise Rejected as cumulative and unnecessary. Adopted in Finding 18, but otherwise Rejected as cumulative and unnecessary. Adopted in Findings 34, 35, 47, 48. Adopted in Finding 51. 49-51. Adopted in Findings 30, 31. Adopted in Findings 34, 35, 47, 48. Rejected as unnecessary and immaterial. Rejected as cumulative. COPIES FURNISHED: W. David Watkins, Esquire P. O. Box 6507 Tallahassee, FL 32314-6507 Ivan Wood, Esquire 1221 Lamar, Suite 1400 Four Houston Center Houston, TX 77010-3015 John H. Parker, Esquire 1200 Carnegie Building 133 Carnegie Way Atlanta, GA 30303 Guyte McCord, Esquire P. O. Box 82 Tallahassee, FL 32302 Cynthia Tunnicliff, Esquire P. O. Drawer 190 Tallahassee, FL 32302 Stephen A. Ecenia, Esquire P. O. Drawer 1838 Tallahassee, FL 32301 Darrell White, Esquire P. O. Box 2174 Tallahassee, FL 32316-2174 S. Power, Agency Clerk 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller, General Counsel 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory Coler, Secretary 1323 Winewood Boulevard Tallahassee, FL 32399-0700 =================================================================
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that petitioner's applications for certificates of need to institute cardiac catheterization and open heart surgery services be GRANTED. Respectfully submitted and entered this 15th of January, 1979, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Kenneth F. Hoffman Rogers, Towers, Bailey, Jones and Gay Post Office Box 1872 Tallahassee, Florida 32302 Robert M. Eisenberg District IV Legal Counsel Post Office Box 2417-F Jacksonville, Florida 32231 Charles Collette Art Forehand, Administrator Assistant General Counsel Office of Community Medical Department of HRS Facilities 1317 Winewood Boulevard Department of HRS Tallahassee, Florida 32301 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue At issue in these proceedings is whether there exists a need for a new open heart surgery program in HRS District IX and, if so, whether the applications of St. Mary's Hospital, Inc. (St. Mary's), Boca Raton Community Hospital, Inc. (Boca), and Martin Memorial Hospital Association, Inc. (Martin), or any of them, for a certificate of need to establish such a program should be approved.
Findings Of Fact Case status In September 1989, Boca Raton Community Hospital, Inc. (Boca), St. Mary's Hospital, Inc. (St. Mary's), and Martin Memorial Hospital Association, Inc. (Martin), filed timely applications with the Department of Health and Rehabilitative Services (Department or HRS) for a certificate of need (CON) to establish a new open heart surgery program in HRS District IX. That district is comprised of Palm Beach, Martin, St. Lucie, Indian River, and Okeechobee Counties. Boca's and Martin's applications sought authorization to establish an adult open heart surgery program, whereas St. Mary's application sought authorization to establish an adult and pediatric open heart surgery program. On January 26, 1990, the Department published notice in the Florida Administrative Weekly of its intent to grant Boca's application, and to deny the applications of St. Mary's and Martin. St. Mary's and Martin filed timely protests to the Department's proposed action, and three existing providers of open heart surgery services in the district, NME Hospitals, Inc., d/b/a Delray Community Hospital (Delray), JFK Medical Center, Inc. (JFK), and AMI/Palm Beach Gardens Medical Center, Inc. (Palm Beach Gardens), timely protested the Department's intention to grant Boca's application or intervened to oppose the approval of any new open heart surgery program in the district. The applicants Boca, a 394-bed not-for-profit community hospital, is the southernmost hospital in Palm Beach County and HRS District IX, being located in Boca Raton, Florida, just two miles north of the Broward County/HRS District X line. It was established in the 1960's, and is a comprehensive hospital providing adult cardiac catheterization services, as well as most services available in an acute care facility, with the exception of a designated psychiatric unit, burn unit, and neonatal intensive care. During the period of April 1988 through March 1989, Boca performed 656 adult inpatient cardiac catheterizations, and referred 192 patients for open heart surgery between July 1988 and June 1989. By its application, Boca proposes to establish an adult open heart surgery program to enhance its cardiology services. Boca's primary service area covers a radius of approximately ten miles around the hospital, and it routinely serves patients from Boynton Beach, Palm Beach County, on the north to Pompano Beach, Broward County, on the south. Presently, three providers of open heart surgery services are located proximate to Boca: approximately 11 miles north of Boca, an average drive time of 17 minutes, is Delray, a current provider of open heart surgery services in District IX; approximately 21 miles north of Boca, an average drive time of 32 minutes, is JFK, a current provider of open heart surgery services in District IX; and approximately 15 miles south of Boca, an average drive time of 19 minutes, is North Ridge General Hospital (North Ridge), a current provider of open heart surgery services in District X and the recipient of the vast majority of referrals for open heart services from Boca. St. Mary's, a 378-bed not-for-profit community hospital located in West Palm Beach, Florida, is owned by the Franciscian Sisters of Allegheny, and has served the community for more than 50 years. In addition to the full range of medical surgical services, St. Mary's offers obstetrics, a Regional Perinatal Intensive Care Center (RPICC) -- levels II and III, blood bank, dialysis center, substance abuse center, hospice center, free-standing cancer clinic, adult inpatient cardiac catheterization laboratory, and children's medical services clinic. Upon the opening of its 40-bed psychiatric center, which is currently under construction, St. Mary's will be the largest hospital in District IX. During the period of April 1988 through March 1989, St. Mary's performed 254 adult inpatient cardiac catheterziations. By its application, St. Mary's proposes to enhance its existing services by establishing an adult and pediatric open heart surgery program. Currently, there are no pediatric open heart surgery programs in District IX. There are, however, two current providers of adult open heart surgery services located in Palm Beach County and proximate to St. Mary's: approximately 6 miles north of St. Mary's is Palm Beach Gardens, and approximately 11 miles south of St. Mary's is JFK. Martin, a 336-bed not-for-profit community hospital established in 1939, is located in Stuart, Martin County, Florida. As with the other applicants, Martin offers a full range of acute care services, as well as adult inpatient cardiac catheterization services, a non-invasive cardiology laboratory, and cardiac rehabilitation and support services for cardiac patients and their families. No significant data is, however, available on Martin's adult inpatient cardiac catheterization program since it is a new service. By its application, Martin proposes to establish an adult open heart surgery program. Currently, there are no open heart surgery programs located in the four northern counties of District IX (Martin, St. Lucie, Indian River, and Okeechobee Counties), and Martin is currently the only hospital located in those four counties that provides in-patient cardiac catheterization services. Accordingly, to access open heart surgery services within the district, residents of the northern four counties must avail themselves of the current programs existent in Palm Beach County. The protestants As heretofore noted, open heart surgery services are currently available at three facilities within District IX; Delray, JFK and Palm Beach Gardens, each of which is located in Palm Beach County. Delray is a 211-bed acute care hospital, sited in the southern portion of Palm Beach County, and located in Delray Beach, Florida. It is a comprehensive hospital providing all services normally available in an acute care facility, with the exception of obstetrics, pediatrics and radiation ontology, and is part of a larger medical campus, operated by the same parent company, that includes a 60-bed inpatient rehabilitation hospital that is physically attached to Delray, a 120-bed psychiatric hospital, and a 120-bed skilled nursing facility. In addition to its other services, Delray provides inpatient cardiac catheterization services and has, since 1986, provided adult open heart surgery services. With a recent addition, Delray has two dedicated open heart operating rooms (ORs) and one back up, as well as three separate intensive care units for coronary care, medical intensive care and surgical intensive care. For calendar year 1989 Delray reported to the local health counsel that it performed 338 open heart cases. Delray is located approximately 11 miles north of Boca, an average drive time of approximately 17 minutes. Between Delray and Boca, there is more than a 50 percent overlap in the medical staffs of the two hospitals, and almost 70 percent overlap in the areas of cardiology and internal medicine. Considering the overlap in the facilities' service areas, it is reasonable to conclude that if Boca's application is approved Delray would lose 122 open heart and 84 angioplasty cares in Boca's first year of operation and 130 open heart and 93 angioplasty cases in Boca's second year of operation. Such losses would translate into a after-tax income loss to Delray of approximately $645,000 in the first year of operation alone. Such loss of revenue and patients could adversely impact Delray's existing program. JFK is a 369-bed community hospital located in Atlantis, Florida; a small town just south of West Palm Beach. It provides a full range of medical- surgical services, with the exception of OB-GYN and nursery services, including cardiac, cancer, orthopedic, and medical/surgical intensive care and coronary care. It established its inpatient cardiac catheterization and open heart surgery program in February 1987, and currently has ten operating rooms, two of which are devoted exclusively to open heart surgery, and a 16-bed cardiac care unit (CCU), 10 beds of which are dedicated to open heart patients. For calendar year 1989, JFK reported to the local health council that it performed 262 open heart cases. As sited, JFK is located just south of West Palm Beach and within 10 miles of St. Mary's. Currently, there is an 83 percent overlap in the MDC-5 service areas (the service area closest to the open heart surgery program) of St. Mary's and JFK, and a substantial overlap between cardiologists on the staffs of both facilities. During the period of January 1988 - May 1990, 43 percent of the patients St. Mary's referred for open heart and angioplasty services were referred to JFK. Assuming St. Mary's could achieve the volumes it projected in its application, it is reasonable to assume that JFK would lose 75 open heart and 83 angioplasty cases in St. Mary's first year of operation, and 91 open heart and 100 angioplasty cases in St. Mary's second year of operation. Such lose in the first year of St. Mary's operation would translate into a net reduction of $1,200,000 in JFK's income. Such loss of revenue and patients could adversely impact JFK's existing program. Palm Beach Gardens is a 205-bed acute care hospital sited in north Palm Beach County. It provides inpatient cardiac catheterization services and has, since 1983, provided open heart surgery services. Currently, Palm Beach Gardens maintains two operating rooms dedicated to open heart surgery, and has a third operating room available for open heart surgery should the demand arise. For calendar year 1989, Palm Beach Gardens was the largest provider of open heart surgery services in the district, having reported to the local health council that it performed 491 open heart cases. Palm Beach Gardens is located approximately 10 miles south of the Palm Beach County/Martin County line or a straight line distance of approximately 25 miles south of Martin and approximately 10 miles north of St. Mary's. During the period of July 1988 - June 1989, 229 residents of St. Mary's primary service area had open heart surgery at Palm Beach Gardens, and 142 residents of Martin's primary service area obtained such services at that facility. If Martin's proposal is approved and its utilization projections realized, Palm Beach Gardens would lose approximately 84 cases in year one of Martin's operation and 101 cases in year two. Such losses in year two would translate into a $1,400,000 pretax reduction in Palm Beach Gardens' net revenues. Such reduction in revenues and patients was not, however, considering Palm Beach Garden's financial condition and open heart surgery volume, shown to have any significant adverse impact to Palm Beach Gardens, or any identifiable program within its facility. Likewise, should St. Mary's application be approved, volumes at Palm Beach Gardens would not be reduced below optimal levels, and it would not suffer any significant adverse impact to existing programs. The parties' stipulation The parties have agreed that the following facts are admitted: Boca, St. Mary's, and Martin Memorial timely filed their Letters of Intent and CON applications at issue in this proceeding. Further, the parties stipulate that the Letter of Intent complied with all statutory and rule requirements. The construction costs of $100,000 as set forth in Table 25 of St. Mary's application is a reasonable construction costs estimate for the renovation of one special procedures room to perform open heart surgery as proposed in St. Mary's schematic plans. The parties admit that adult open heart surgery services are currently available within a maximum automobile travel time of two hours under average travel conditions for at least 90 percent of HRS Service District IX's population. This stipulation is not meant to preclude other relevant evidence regarding travel times within or without District IX. All existing providers of open heart surgery in District IX are JCAHO accredited; all applicants in this proceeding are JCAHO accredited. Each of the applicants, if approved, have the ability to implement and apply circulatory assist devices such as intra-aortic balloon assist and prolonged cardiopulmonary partial bypass for adult open heart surgery. Each of the applicants, if approved, will be capable of fulfilling the requirements of an adult open heart surgery program to provide the following services: medicine, for example, cardiology, hematology, nephrology, pulmonary medicine and infectious diseases; pathology, for example, anatomical, clinical, blood bank and coagulation lab; anesthesiology, including respiratory therapy; radiology, for example, diagnostic nuclear medicine lab; neurology; adult cardiac catheterization laboratory services; non-invasive cardiographics lab, for example, electrocardiography including cardiographics lab, for example, electrocardiography including exercise stress testing, and echocardiography; intensive care; and emergency care available 24 hours per day for cardiac emergencies. This stipulation relates only to the provision of medical services, not that the applicants have sufficient capacity to provide those services in connection with an open heart surgery program. The redesignation of acute care beds from medical/surgical beds to any type of critical care unit beds, except for neonatal intensive care beds, does not require a certificate of need unless the hospital incurs a capital expenditure in excess of the capital expenditure threshold in accomplishing this redesignation. The Department's open heart surgery and methodology and the "fixed need" pool. On August 11, 1989, the Department, pursuant to Rule 10-5.008(2)(a), Florida Administrative Code, published notice of the fixed need pool for open heart surgery programs for the July 1992 planning horizon in the Florida Administrative Weekly. Pertinent to this case, such notice established a net need for zero new adult open heart surgery programs in District IX. There was, however, no publication of any fixed need pool for pediatric open heart surgery. Following publication of the fixed need pool, the Department received protests contending that its calculation of net need was erroneous. Upon review, the Department concluded that its initial calculation was in error, and on September 1, 1989, the Department published a notice of correction in the Florida Administrative Weekly, and established a new net need for one open heart surgery program in District IX. On September 5, 1989, St. Mary's challenged the Department's corrected need assessment, claiming the Department had underestimated the need in District IX for adult open heart surgery services, and on September 8, 1989, Palm Beach Gardens challenged the Department's assessment, claiming the Department had overestimated the need for open heart services in the district. These challenges were forwarded by the Department to the Division of Administrative Hearings, along with a request for the assignment of a hearing officer to conduct all necessary proceedings required under law. Pertinent to the derivation of the fixed need pool, the Department has established by rule an adult and pediatric open heart surgery methodology that must normally be satisfied before any new open heart surgery programs will be approved. That methodology, codified in Rule 10-5.011(1)(f), Florida Administrative Code, forms the premise for the Department's calculation of net need in the instant case. Pertinent to this case, Rule 10-5.011(1)(f), Florida Administrative Code, provides: 2. Departmental Goal. The Department will consider applications for open heart surgery programs in context with applicable statutory and rule criteria. The Department will not normally approve applications for new open heart surgery programs in any service area unless the conditions of Sub-paragraphs 8. and 11., below are met. * * * 8. Need Determination. The need for open heart surgery programs in a service area shall be determined by computing the pro- jected number of open heart surgical pro- cedures in the service area. The following formula shall be used in this determination: Nx = Uc X Px Where: Nx = Number of open heart procedures projected for year X; Uc = Actual use rate (number of procedures per hundred thousand popu- lation) in the service area for the 12 month period beginning 14 months prior to the Letter of Intent deadline for the batching cycle; Px = Projected population in the service area in Year X; and Year X = The year in which the proposed open heart surgery program would initiate service, but not more than two years into the future. * * * 11.a. There shall be no additional open heart surgery programs established unless: the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 adult open heart surgery cases per year or 130 pediatric heart cases per year; and, the conditions specified in Sub-paragraph 5.d., above, will be met by the proposed program. No additional open heart surgery programs shall be approved which would reduce the volume of existing open heart surgery facilities below 350 open heart procedures annually for adults and 130 pediatric heart procedures annually, 75 of which are open heart. Sub-subparagraph 5d, referenced in subparagraph 11a(II), provides: Minimum Service Volume. There shall be a minimum of 200 adult open heart procedures performed annually, within 3 years after initiation of service, in any institution in which open heart surgery is performed for adults. There shall be a minimum of 100 pediatric heart operations annually, within 3 years of initiation of service, in any insti- tution in which pediatric open heart surgery is performed, of which at least 50 shall be open heart surgery. Essentially, the subject methodology contemplates that three conditions must be satisfied before an application for a new adult open heart surgery program in the district would normally be approved: (1) a calculated net numeric need under the Department's mathematical methodology; (2) a determination that "the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 open heart surgery cases per year"; and (3) a demonstration that the applicant could perform "a minimum of 200 open heart procedures (cases) annually within 3 years after service is initiated." The first two conditions are utilized by the Department to initially establish the fixed need pool for open heart surgery services. The third condition is, by rule, related to an applicant's ability to provide quality care, and will be discussed infra. As a threshold for calculating need, and the fixed need pool, the Department's mathematical need methodology contains the formula for deriving the gross number of open heart surgical cases anticipated two years into the future. This methodology is based on the actual use rate in the district for the 12- month period beginning 14 months prior to the letter of intent deadline for the batching cycle. The number of cases is then divided by 350, which is consistent with the minimum service volume mandates of subparagraph 11 of the rule, to derive an actual gross need for open heart surgery programs at the horizon year. Existing and approved programs are then substracted to determine if there is a net need for a new open heart surgery program. While there was some dispute among the parties as to what the appropriate underlying data was to drive the Department's numerical need methodology, the parties agreed and the proof demonstrated a fractional need greater than .5, under the formula. 1/ The second step in establishing a need for open heart surgery programs, and the fixed need pool, is a determination, as required by subparagraph 11(2)I of the rule, of whether "each existing and approved open heart surgery program within the service areas is operating at and is expected to continue to operate at 350 adult open heart surgery cases per year." Here, based on the data available to the Department when it established the fixed need pool, the three existing providers had operated at the following case levels for the preceding year: Palm Beach Gardens - 494 cases; Delray - 328 cases; and JFK - 275 cases. Consequently two of the three existing providers were not operating at 350 cases per year. 2/ Based on the foregoing data, the Department initially published a net need for zero new open heart surgery programs in District IX. However, following the receipt of protests to the fixed need pool it had established, the Department, based on the same data, concluded its initial decision was erroneous, and published a notice of correction which established a net need for one new open heart surgery program in the district. This decision was timely challenged. The Department's ultimate decision to publish a need for one new program was based on two factors. First, the Department had historically rounded the numerical need up where fractional need, as calculated by its methodology, was .5 or higher. Second, although of questionable validity at the time, the Department had for several years "interpreted" the 350 case level, referred to in subparagraph (11) of the rule, to require that the average of the existing programs be at 350 before a new program would be approved, as opposed to the literal rule requirement that "each existing and approved open heart surgery program ... [be] ... operating at ... a minimum of 350 adult open heart surgery cases per year." Accordingly, with differing views then pending in the Department, it elected to recalculate the utilization level by applying the averaging approach, as opposed to applying the rule as written which it had done in initially determining zero need, and therefore published a corrected need for one new program. On January 23, 1990, the Department issued final orders in three cases, each of which involved CON applications for open heart surgery services filed in the September 1988 batching cycle, Hillsborough County Hospital Authority v. Department of Health and Rehabilitative Services, 12 FALR 785 (1990), Humana of Florida, Inc. v. Department of Health and Rehabilitative Services, 12 FALR 823 (1990), and Mease Health Care v. Department of Health and Rehabilitative Services, 12 FALR 853 (1990). In each final order the Department's Secretary stated, with regard to the Department's averaging interpretation, that: I conclude that the rule should be applied as written and that numeric need should be found only where each existing and approved open heart surgery program within the service district is operating at a minimum level of 350 open heart cases per year .... I am not unmindful that the conclusion reached here departs from an established practice of interpreting subparagraph 11 of the need rule by averaging the number of cases done by the existing providers and finding subparagraph 11 to be satisfied if the average was 350 cases or more. As previously stated, I am now satisfied that application of the rule as written is more consistent with sound health planning .... Consequently, the averaging practice that resulted in the Department's corrected notice of need for the September 1989 batching cycle at issue in this case was specifically rejected by the Department as being contrary to the rule as written before it published its notice of intent to grant Boca's application. Even though the corrected need published by the Department was erroneous, as being derived contrary to the express language of the rule methodology, the Department and the applicants contend that such error is not subject to correction in this case because of the Department's fixed need pool rule and the Department's incipient policy regarding when it will correct errors in a fixed need pool that has already been published. Such contentions are, however, unpersuasive as a matter of law, discussed infra, and as not supported by any compelling proof. The Department's fixed need pool rule, codified at Rule 10- 5.008(2)(a), Florida Administrative Code, provides: Publication of Fixed Need Pools. The depart- ment shall publish in the Florida Administra- tive Weekly, at least 15 days prior to the letter of intent deadline for a particular batching cycle the fixed need pools for the applicable planning horizon specified for each service ... These batching cycle specific fixed need pools shall not be changed or adjusted in the future regardless of any future changes in need methodologies, popu- lation estimates, bed inventories, or other factors which would lead to different projections of need, if retroactively applied. In this case there has been no change in the Department's need methodology that leads to a different projection of need, as proscribed by the fixed need pool, but, rather, an identified failure of the Department to properly apply its rule when it assessed need. While the Department may have consistently misapplied its rule in the past, such consistency does not cloth it past action with any propriety where, as here, such action is properly challenged or, stated differently, because the rule was misapplied in the past does not lead to the conclusion that its proper application constitutes a change in need methodologies. Accordingly, it is found that the fixed need pool rule does not, under the circumstances of this case, preclude correction of the need established through the Department's publication of its notice of correction. 3/ The Department and the applicants also contend that the Department's policy on how it will treat corrections to a fixed need pool that has already been published, and errors in a published fixed need pool which are discovered after the cycle has begun, precludes any correction of the need published for this batching cycle. Pertinent to this point, the Department points to its policy, which was published in the Florida Administrative Weekly contemporaneously with its initial assessment of zero need, that provides: Any person who identifies any error in the fixed need pool numbers must advise the agency of the error within ten (10) days of publica- tion of the number. If the agency concurs in the error, the fixed need pool number will be adjusted prior to or during the grace period for this cycle. Failure to notify the agency of the error during this ten day period will result in no adjustment to the fixed need pool number for this cycle and a waiver of the person's right to raise the error at subsequent proceedings. Any other adjustments will be made in the first cycle subsequent to identification of the error including those errors identified through administrative hearings or final judicial review. Any person whose substantial interest is affected by this action and who timely advised the agency of any error in the action has a right to request an administrative hearing pursuant to Section 120.57, Florida Statutes. In order to request a proceeding under Section 120.57, Florida Statutes, your request for an administrative hearing must state with specifi- city which issues of material fact or law are in dispute. All requests for hearings shall be made to the Department of Health and Rehab- ilitative Services and must be filed with the agency clerk at 1323 Winewood Blvd. Building 1, Room 407, Tallahassee, Florida 32301. All requests for hearings must be filed with the agency clerk within 30 days of this publication or the right to a hearing is waived. According to the Department, its policy is to correct computational errors in the fixed need pool only if they are brought to its attention during the grace period which is triggered by the filing of a letter of intent, and if there is sufficient time to publish a corrected fixed need pool prior to the CON application deadline so that all potential competing providers will have notice of the changes. Errors brought to the Department's attention after the grace period will only be considered in the development of the subsequent batching cycle's fixed need pool, regardless of the nature or magnitude of the error. Errors brought to the Department's attention during the grace period, but not reviewed by the Department until after the grace period would only be corrected for subsequent batches. Errors identified in administrative hearings or upon judicial review, even though predicated upon a timely notice of error to the Department, would be corrected in subsequent batches, but not for the batch in which the error occurred. The Department's enunciated rational for the foregoing policy is to instill "predictability" in the CON process, which it suggests promotes competition and affords the Department an opportunity to select from a broader field the best qualified applicants to "meet the need." Such rationale lacks, however, any reasonable basis in fact where, as here, there is no need to be met, and affronts sound health planning principles. The 350 minimum procedure level established for existing providers, before a new program can be approved, is an important threshold bearing on quality of care. In this regard, it has been demonstrated that there is a direct relationship between volume of procedures and mortality, with better results being obtained at facilities operating at a minimum level of 200-350 procedures annually. Accordingly, precision in assessing the need for new open heart surgery programs is crucial to assure that any new program could reasonably be expected to achieve a sufficient level of service, and to assure that the level of service provided by existing facilities would not fall below the optimum threshold. The Department's policy ignores this relationship, would recognize a need where none exists and thereby adversely impact existing programs, and would impinge on future planning horizons. As importantly, the Department's policy would supplant its own rule methodology for calculating need, and render illusory any decision based on a balanced review of statutory criteria. Accordingly, it is concluded that the Department has failed to explicate its policy choice in the instant case, and that numeric need under the Department's methodology is a viable issue in these proceedings. The need for the services being proposed in relationship to the district plan and state health plan. Applicable to this case is the 1989 Florida State Health Plan, which contains the following preferences to be considered in comparing applications for open heart surgery programs: Preference shall be given to applicants estab- lishing new open heart surgery programs in larger counties in which the percentage of elderly is higher than the statewide average and the total population exceeds 100,000. Preference for new open heart surgery programs shall be given to applicants clearly demonstra- ting an ability to perform more than 350 adult procedures annually within three years of initiating the program. Quality of care has been demonstrated to be directly related to volume; thus, facilities are expected to perform a minimum of 350 adult procedures annually. Preference shall be given to applicants who will improve access to open heart surgery for persons who are currently seeking the service outside of their HRS district. This will improve accessibility and reduce travel time for the residents in the district. Preference shall be given to an applicant with a history of providing a disproportionate share of charity care and Medicaid patient days in the respective acute care subdistrict. Qualifying hospitals shall meet Medicaid disproportionate share hospital criteria. Priority should be given to an applicant who provides services to all persons, regardless of their ability to pay. Preference shall be given to an applicant that can offer a service at the least expense yet maintain high quality of care standards. The physical plant of larger facilities can usually accommodate the required operating and recovery room specifications with lower capital expendi- tures than smaller facilities. Larger facilities also have a greater pool of the specialized personnel needed for open heart surgical procedures. Preference shall be given to an applicant that performs percutaneous transluminal angioplasty, streptokinase, or other innovative techniques as alternatives to surgery for low-risk patients. The applicant shall include in its application a protocol regarding the selection of patients for surgery or alternative non-surgical therapeutic cardiac procedures. All three applications are reasonably consistent with the state health plan's preference for establishing open heart surgery programs in counties in which the percentage of elderly is higher than the statewide average and the total population exceeds 100,000. In 1989, Palm Beach County had a population of 873,347, 23.4 percent of which were age 65 and over, which was higher than the statewide average of 17.9 percent. The next most populous counties in the district fell within Martin's primary service area, and were St. Lucie County, with a population of 142,440, 18.3 percent of which were age 65 and over, and Martin County, with a population of 96,336, 25.1 percent of which were age 65 and over. In all, the northern four counties had a population of 360,644, 21.2 percent of which were age 65 and over. The state health plan also accords a preference to applicants who clearly demonstrate an ability to perform more than 350 adult procedures within three years of initiating the program. Of the three applicants, Boca is in the best position to achieve the preference based on the number of diagnostic cardiac caths performed at this facility, and the number of patients it has referred for open heart surgery. Comparatively, Martin and St. Mary's are unlikely to achieve such level of service within three years of initiating a program. The third objective of the state health plan accords a preference for the applicant that will more clearly improve access to open heart surgery for persons who are currently seeking the service outside the district. Currently, while there is no access problem in the district, it is apparent that many district residents leave the district for open heart surgery. During the period of July 1988 - June 1989, open heart procedures were performed on 782 people residing in Boca's primary service area. Of those, 316 received treatment in a District IX facility, 383 received treatment in a District X (Broward County) facility, and the balance received treatment elsewhere, but predominately in Dade County (District XI). While there was a substantial outmigration from Boca's primary service area for open heart services, the vast majority of such outmigration, 325 people, was serviced at North Ridge, a mere fifteen mile/nineteen minute trip from the Boca area. With regard to St. Mary's primary service area, the proof demonstrated that during the same period 566 people sought open heart services, with 455 of those people receiving treatment within District IX. Of the 111 who sought service outside the district, 41 received treatment in Broward County and 61 received treatment in Dade County. Finally, with regard to Martin's primary service area, 316 people sought open heart services, with 148 of those people receiving treatment within the district. Of the 168 who sought service outside the district, 90 received treatment in Broward County, 29 in District VII hospitals, and 39 in Dade County. As heretofore noted, access is not a problem within District IX. However, to the extent this preference seeks to address the issue of outmigration, the proof demonstrates that Martin is the superior applicant. Clearly, the 15 mile/19 minute trip from the Boca area to North Ridge is not a barrier to access, and the number of people from St. Mary's primary service area seeking services outside the district are small in comparison to the other applicants. The residents of Martin's primary service area who seek treatment outside the district are, however, disproportionately large when one considers the aggregate travel time they incur when accessing services in the Orlando or Melbourn areas, or Dade and Broward Counties. The fourth objective of the state health plan accords a preference for the applicant with a history of providing a disproportionate share of charity care and Medicaid patient days in the district. Among the applicants, St. Mary's is the only disproportionate share provider and provides the largest number of Medicaid patient days in the district. As between Boca and Martin, the proof demonstrates that Martin is more committed to, and has historically been a greater provider of, care to the medically indigent. The fifth objective of the state health plan accords a preference to the applicant that can offer a service at the least expense yet maintain high quality of care standards. Here, each of the applicants are large facilities, with demonstrated commitments to maintaining high quality of care standards. Martin has, however, demonstrated that it can offer the proposed service at the least expense. 4/ The last objective of the state health plan accords a preference to the applicant that will perform percutaneous transluminal angioplasty, strepokinase, or other innovative techniques as alternatives to surgery. Here, all applicants propose to offer such services. District IX's 1988 Health Plan was in effect at the time the CON applications were at issue in this case were filed; however, that plan had not been adopted as a rule. Accordingly, such plan is not pertinent to this proceeding. Venice Hospital, Inc. v. Department of Health and Rehabilitative Services, Case Nos. 90-2383R, et seg., (DOAH 1990). The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the district. Open heart surgery is a specialized, tertiary health care service. A tertiary health service is defined by Section 381.702(20), Florida Statutes, as: ... a health service which, due to its high level of intensity, complexity, specialized or limited applicability, and cost, should be limited to, and concentrated in, a limited number of hospitals to ensure the quality, availability, and cost-effectiveness of such service.... As a tertiary service, planning for open heart surgery services is done on a regional basis and concentrated in a limited number of hospitals to insure the quality, availability and cost effectiveness of the program. Essentially, the concept of regionalization creates a distinction between hospitals; some hospitals offer routine acute care services, while special high risk services are concentrated in a limited number of hospitals. Encompassed within such concept is the expectation that patients will be transferred from one facility to another to obtain tertiary care services. As a touchstone for assessing need within a service district, the Department has adopted the open heart surgery need methodology, discussed supra, that must normally be satisfied before a new open heart surgery program will be approved. Under that methodology, further need for adult open heart surgery programs is determined based on the projected increase in the number of open heart surgery procedures two years into the future and the open heart surgery volume of existing providers. The rule provides that, regardless of the projected growth in the number of open heart procedures, no additional adult open heart programs are granted unless each existing adult open heart program performs a minimum of 350 procedures annually. Application of the rule methodology to the facts of this case projects a growth in the projected number of open heart procedures sufficient to support a fractional need greater than .5, which the Department reasonably rounded to 1. However, two of the existing three providers were not performing a minimum of 350 procedures annually. Therefore, there is no need under the Department's methodology for a new open heart surgery program in District IX. While no need under the Department's methodology, the applicants have advanced several factors which they contend reflect negatively on the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization or adequacy of existing open heart programs in the district, and which they suggest warrant a finding of need based on special or not normal circumstances. Foremost among the factors pressed by the applicants as indicitive of an abnormal circumstance is the high number of District IX residents who seek open heart surgery services outside the district; referred to in this case as outmigration. Outmigration is, however, simply an observation of patient flow patterns and does not, in and of itself, constitute an abnormal circumstance that would demonstrate need in the district. Rather, to demonstrate a not normal circumstance, such outmigration must be demonstrated to be a consequence of some failing of existing programs, i.e., accessibility or quality of care, to be pertinent to any abnormal need assessment. 5/ In this case, there is no such failing in the existing programs. The three existing adult open heart surgery programs in the district are currently available to 90 percent of the population of the district within a maximum automobile travel time of two hours. Under such circumstances there is no geographic access problem within the district. Moreover, only Martin would actually enhance accessibility, were it a problem, because the residents of the four northern counties it proposes to serve must currently travel to Palm Beach County to access services within the district. In contrast, Boca is within approximately 30 minutes travel time of two existing providers in the district and an additional provider in District X. Likewise, St. Mary's is located less than 10 miles from two of the existing providers in the district. As with geographic access, there is likewise no economic access problem in the district. While the Medicaid use rate within the district for calendar year 1989 was .1 percent, well below the statewide average of approximately 2 percent, such raw statistic does not demonstrate that there is a Medicaid access problem in the district. To persuasively demonstrate such fact from use statistics would require a demonstration that Palm Beach County's use rate was significantly lower than counties with similar demographics. Here, there was no such showing. Moreover, St. Mary's, the largest provider of Medicaid services in the district, was only shown to have transferred three Medicaid patients for open heart or angioplasty services from January 1988, through May 1990. Finally, each of the existing providers have contracted with the Palm Beach County Health Care District to provide care to indigent patients, and have not refused service to anyone regardless of their ability to pay. Accordingly, it is concluded that there is no economic access problem within the district. With two of the three existing providers operating below 350 procedures when this cycle commenced, there is clearly excess capacity within the district when one considers the fact that a single operating room has the capacity to handle at least 500 cases annually. In reaching this conclusion, the applicants' assertion that delays may have been encountered in gaining admission to some facilities during the season because of a lack of critical care beds has not been overlooked. However, any such delays were not reasonably quantified in terms of number or duration, and were not shown to be significant. As importantly, existing facilities have increased their critical care bed capacity, and can increase it further by merely redesignating acute care beds from medical/surgical beds to any type of critical care beds needed as the exigency arises. Although two of the three existing providers offer relatively new programs, the proof is compelling that each provides a quality surgical and post surgical open heart surgery program, appropriately staffed, and that there is no want of quality care within the district. The use of agency nurses, as suggested by one applicant, was not persuasively demonstrated to reflect adversely on quality of care. Succinctly, simply because one is an agency nurse does not suggest substandard performance, and the use of agency nurses, as needed, to staff a facility does not, of itself, aversely impact patient care. Here, the staffs of existing facilities are appropriately trained and supervised, and offer their patients a quality program. While there is certainly a significant outmigration from the district for open heart surgery services, such outmigration was not shown to be related to any infirmity in existing programs. Rather, such outmigration is most reasonably attributable to physicians' established referral patterns or patient preference. 6/ Finally, regarding special circumstances, St. Mary's suggests that its designation as a trauma center and the lack of pediatric open heart services to 90 percent of the population within a maximum automobile travel time of two hours warrant approval of its application. Such suggestions are, however, not supported by compelling proof. While it is true that St. Mary's has been selected by the Palm Beach County Health Care District, along with Delray, for designation as a Level II trauma center, such designation has not been contractually finalized and St. Mary's has not applied for such designation with the Department. As importantly, on October 1, 1990, a new law regarding trauma centers became effective which will reopen the county trauma center designation process, and require facilities to be designated by the state as trauma centers. Under such circumstances, it is speculative whether St. Mary's will become a trauma center, and until such event actually occurs such factor is not significant to these proceedings. St. Mary's quest for a pediatric open heart surgery program is premised on special circumstances, not numeric need, and finds it basis on the fact that no pediatric open heart surgery program exists in the district and that such pediatric services are not available to 90 percent of the population within two hours travel time. While such may be the case, St. Mary's application, on balance, fails to support such an award for a number of reasons. First, St. Mary's application projects that it will perform 10 pediatric open heart surgery cases in its first year of operation, and 20 in its second year of operation. It contains no projection for the third year of operation, but St. Mary's consultant, Michael Schwartz, opined that St. Mary's would perform 50 pediatric open heart surgery cases by the third year based on his belief that St. Mary's would capture 80 to 100 percent of the potential pediatric referrals from District IX and the northern portion of District X. Mr. Schwartz's opinions are not, however, credible. During the period July 1, 1988 to June 30, 1989, there were 40 pediatric open heart surgery cases performed on patients residing throughout District IX, with 22 receiving treatment at Jackson Memorial (Dade County), 14 at Miami Children's Hospital, and 4 at Shands in Gainesville. During the same period, there were 24 open heart pediatric patients in northern District X, an area equi-distant in travel time from the Miami facilities and St. Mary's, with 15 receiving treatment at Jackson Memorial, 8 at Miami Children's Hospital and 1 at Shands. Each of these facilities are either teaching hospitals or specialty pediatric hospitals, are among the top four facilities in the state that perform over 100 pediatric open heart surgery cases each year, and each enjoys an excellent reputation for providing quality pediatric care. Given existent referral patterns and the quality of existing pediatric programs, it is improbable that St. Mary's could reach its projected utilization for years one and two, much less attain a level of 50 pediatric open heart surgery cases during its third year of operation. In 1994, the third year of St. Mary's program, there would be approximately 53 pediatric open heart surgery cases performed on patients residing throughout District IX. To attain a level of 50 cases in its third year, St. Mary's would have to attract almost 100 percent of all cases arising within the district, an improbable occurrence. Equally improbable is St. Mary's ability to penetrate the pediatric open heart surgery market in northern Broward County, an area defined by Mr. Schwartz as being equi-distant in travel time from the Miami facilities and St. Mary's, given existent referral patterns and physicians' satisfaction with existing programs. In sum, the proof demonstrates that St. Mary's could not reasonably be expected to perform 50 pediatric open heart surgery cases within three years of initiating service. In addition to its inability to generate sufficient volume to maintain service quality in a pediatric open heart surgery program, St. Mary's also lacks a pediatric cardiac cath program which is required of any facility proposing pediatric open heart surgery services. Notably, with regard to pediatric cardiac services, Rule 10-5.011(1)(e), which relates to cardiac catheterization services, and Rule 10-5.011(1)(f), which relates to open heart services, are mutually dependent. The cardiac catheterization rule, as it relates to pediatrics, provides: 6. Coordination of Services. * * * Pediatric cardiac catheterization programs must be located in a hospital in which pediatric open heart surgery is being performed. * * * 8. Need Determination. * * * f. Pediatric cardiac catheterization programs shall be established on a regional basis. A new pediatric cardiac catheterization program shall not normally be approved unless the numbers of live births in the service planning area, minus the number of existing and approved programs multiplied by 30,000, is at or exceeds 30,000. (Emphasis added) Also pertinent to this issue, the open heart surgery rule provides: 3. Service Availability. * * * c. The following services must be provided in the health care facility within which the open heart surgery program is located and must be capable of fulfilling the requirements of an open heart surgery program: * * * (VI) Cardiac catheterization laboratory.... The Department reasonably interprets the foregoing provisions as mandating that a pediatric cardiac catheterization program or pediatric open heart surgery program may not be approved independent of the other but, rather, they must coexist. Since the proof is clear that St. Mary's only operates and is only approved by the Department to operate an adult cardiac cath program, and it has not applied for a pediatric cardiac cath program, its proposal is deficient. 7/ In view of the foregoing, it is concluded that, while pediatric open heart services are not currently available within District IX and are not available to 90 percent of the population within two hours travel time, that St. Mary's application to initiate such services should be denied. It is further found that the provisions of the open heart surgery rule relating to the two- hour access standard, which does not specifically state whether such standard applies to adult, pediatric or both, is not applicable to pediatrics. Rather, the Department interprets such rule provision to apply only to adult programs, because such standard is not necessarily pertinent to pediatric open heart surgery since it is more specialized or tertiary in nature than adult open heart surgery programs. Given the close relationship between the cardiac cath rule and the open heart surgery rule, the Department's position is reasonable. In this regard, the cardiac cath rule establishes a travel standard for adult programs, but not pediatric. Rather, it provides for establishment of such programs on a "regional basis," and provides that a new pediatric cardiac cath program should not normally be approved unless the number of live births exceeds 30,000. Here, there were only 16,500 live births in District IX in 1988, a number that is insufficient to warrant a pediatric cardiac cath program. Given such fact, and the relationship between the two rules, the Department's interpretation is reasonable and the two-hour travel time standard does not apply to pediatric open heart surgery. Finally, as to adult open heart surgery services, it is concluded that there exist no special circumstances within the district that would warrant approval of a new open heart surgery program, and that existing facilities are providing appropriate quality care that is accessible to all residents of the district regardless of their ability to pay. The ability of the applicant to provide quality of care and the applicant's record of providing quality of care. Each of the applicants in this case has established an excellent record for providing quality care to their patients, and would be generally expected to provide high quality care for open heart surgery patients notwithstanding some failings in their applications. During the course of the proceeding, some protestants contended that because an applicant failed to detail some particular item of equipment essential to an open heart program, that such failing reflected adversely on their ability to provide quality care. While such could be the case in the abstract, it does not, where, as here, the applicants have sound records, with a demonstrated ability to attract quality personnel to staff their programs. Such failings are, however, germane to the feasibility of the applicant's proposals, discussed infra. Other failings pointed to by the protestants, included: St. Mary's proposal to utilize a call team composed of nurses who customarily assist at thoracic surgery and to recover its open heart patients in a mixed intensive care unit; St. Mary's inability to achieve a 200 and 350 case level per year; Martin's inability to achieve a 350 case level per year; and Martin's failure to document in its application the manner in which it could rapidly mobilize an open heart surgery team 24-hours a day, or how it would treat emergency patients within a two-hour period. Again, considering the quality of the applicants, and the quality personnel they will attract, as well as the parties' stipulation, these failings are minor and do not reflect adversely on their proposals with but one exception. 8/ The only significant factor presented that could bear on an applicant's ability to provide quality care is its ability to achieve optimal utilization levels. In this regard, it has been demonstrated that a relationship exists between the volume of open heart surgical procedures performed at a hospital and the quality of care rendered at those facilities, as measured by patient outcomes. Overall, facilities performing more than 350 cases per year experienced the lowest in-hospital death rate, with those performing more than 200 cases per year being next in line. Pertinent to this issue, the Department has adopted Rule 10-5.011(f)5, Florida Administrative Code, which addresses service quality for open heart surgery programs. That rule, as heretofore noted under the findings related to the Department's need methodology, requires that a minimum of 200 adult open heart surgery cases be performed annually within 3 years of initiating the service, and that at least 50 pediatric open heart surgery cases be performed within 3 years of initiating such service. Here, St. Mary's has failed to demonstrate that it can achieve such level of utilization, and its ability to offer a quality program is therefore suspect. As importantly, Rule 10- 5.011(f)11.a.(II) precludes the approval of St. Mary's application under such circumstances. Boca and Martin could reasonably expect to perform at least 200 cases within 3 years. The need in the service district of the applicant for special equipment and services which are not reasonably and economically accessible in adjoining areas, and the needs and circumstances of those entities which provide a substantial portion of their services or resources to individuals not residing in the service district in which the entities are located. As heretofore noted, North Ridge is located in northern Broward County, a mere 15 mile/19 minute drive time from Boca. North Ridge is a 395-bed hospital that provides all services with the exception of obstetric and radiation therapy, and has for 15 years provided open heart surgery services. It currently has two cardiac catheterization laboratories, and two dedicated and two backup open heart operating rooms. At an average of 750 cases per year, over the last few years, North Ridge has additional capacity, and could comfortably accommodate 1,000 cases per year. North Ridge's primary service area is, and has been for sometime, northern Broward County and southern Palm Beach County, although prior to the initiation of other services in Palm Beach County it serviced the entire area. North Ridge markets extensively in southern Palm Beach County, has follow-up activities for its Palm Beach County residents, and has strong ties with the physician community in southern Palm Beach County. Accordingly, North Ridge has an established presence in southern Palm Beach County, with approximately 30-40 percent of its patients coming from that area. North Ridge's mortality statistics, along with its utilization and reputation, mark it as an excellent facility with a quality open heart surgery program. Moreover, its charges for open heart surgery services are significantly below those of Palm Beach County facilities, as well as those proposed by Boca. North Ridge's location makes it easily accessible to the patients of southern Palm Beach County, and physicians have not experienced any significant problems gaining access to that facility. Moreover, Boca's patients have been accorded first priority at North Ridge. With new technology and the development of various drug therapies, it is extremely rare for a patient to have such an urgent need for open heart surgery that transportation becomes a significant issue. When urgently needed, North Ridge, as well as Delray, can adequately serve the needs of southern Palm Beach County. In sum, there is a viable alternative for residents of southern Palm Beach County to Boca's application, and that is their continued referral to North Ridge. That program is easily accessible, reasonably priced, and historically sound. On the other hand, to approve Boca's application would significantly adversely impact North Ridge, since their service areas in southern Palm Beach County and northern Broward County overlap in most material respects. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operations. Each applicant has demonstrated that it either has or can obtain all resources, including health manpower, management personnel and funds for capital and operating expenditures. Boca and Martin each have the funds on hand for project accomplishment, and St. Mary's has demonstrated its ability to acquire such funds through donations, as needed, for project accomplishment. Each applicant is a quality provider of acute care services, and has demonstrated through its existing programs its ability to attract and retain appropriate management and health manpower for project accomplishment, notwithstanding the current nursing shortage being experienced locally and nationally. Accordingly, while the cost of skilled personnel to staff their open heart surgery programs may exceed their initial estimates in some cases, any of the applicants should be able to appropriately staff their program through the use of existing staff, national or local recruitment, or a combination thereof. While each applicant has adequate resources, the viability of Boca's application has been challenged based on its failure to provide a complete list of all capital projects in its application, as required by Section 381.707(2)(a), Florida Statutes. In this regard, the proof demonstrates that the only item listed in its application was for an "expansion/upgrade" of the physical plant at a proposed cost of $6.2 million. That information was an accurate financial description of that project at the time, but did not include other items relating to other construction and equipment purchases to which Boca was committed. In this regard, as of September 1989, Boca had committed itself to an additional $1,261,400 for projects relating to its 1989 fiscal year and $1,380,039 for projects relating to its 1990 fiscal year, for a total of $2,641,439. All of these items will be capitalized by Boca, and it could have provided a list or summary of such projects at the time of filing its application in September 1989. Boca's failure to do so, failed to comply with section 381.707(2)(a), and prevented the Department from having a complete picture of Boca's financial resources to complete the project. The extent to which the proposed services will be accessible to all residents of the service district, and the applicant's past and proposed provision of health care service to Medicaid patients and the medically indigent. Of the proposed programs, only those advanced by St. Mary's and Martin would be reasonably accessible to all residents of the service district. In this regard, the geography and population densities of the district demonstrate that Palm Beach County, at 1,993 square miles, is the single most populous county in the district, with a 1989 population of 873,347. The northern four counties are geographically larger than Palm Beach County, at 2,404 square miles, and contained a 1989 population of 360,664, nearly one-third of the total population of the district. The most dense population in the northern four counties is the Martin County/Port St. Lucie area. The district itself measures 100 miles in length, north to south, in a straight line. Martin is located approximately 60 miles from the southern boarder of the district, St. Mary's is approximately 30 miles, and Boca is 2.1 miles Considering Boca's geographic location, it would not be readily accessible to all residents of the district. Martin and St. Mary's are, on the other hand, sited such that they could, geographically, address the needs of the district as a whole. However, St. Mary's, like Boca, is proximate to a number of open heart surgery providers and would not improve geographic accessibility within the district, as would Martin. Further bearing on the issue of accessibility, is the applicants' commitment to service Medicaid and the medically indigent. In this regard, the proof demonstrates that Boca has not been an historic provider of Medicaid or indigent care, and for its fiscal 1989 dedicated less than 1 percent of its total admissions to Medicaid and indigent care. On the other hand, St. Mary's patient mix has included 15 percent Medicaid and 5 percent indigent, and it is the highest Medicaid provider in the district. Martin has, although to a lesser degree than St. Mary's, also demonstrated a commitment to the underserved by historically serving 5 1/2 percent Medicaid and indigent patients. In its application, Boca "committed" to provide at least 2 percent of gross revenue generated by the open heart surgery program for the provision of charity or indigent care on an annual basis. Considering Boca's nominal historic commitment to indigent care, its location in an affluent area of Palm Beach County, and its closed staff, Boca could not reasonably achieve such level of care, and would not increase accessibility for underserved groups. Comparatively, St. Mary's and, to a lesser extent, Martin, would increase accessibility for underserved groups should the need exist. Here, St. Mary's has projected that 7 percent of its total patient days will be devoted to Medicaid patients and 3 percent to indigent patients, and Martin has projected 5 percent Medicaid and indigent. The costs and methods of the proposed construction. In its application, Boca estimated a total project cost of $7,499,856 to construct and equip a new addition to house its open heart surgery program. That figure included a $6,147,900 construction fund and $783,056 for equipment costs to complete the two operating suites, recovery areas and ten-bed surgical intensive care unit proposed. Its estimates were, however, deficient. Boca's equipment budget, as it appeared in its application, was prepared by an individual who had no expertise in this area, and was deficient in terms of the actual equipment listed and its cost. To properly equip and furnish the two operating room suites, recovery room areas and a ten-bed surgical intensive care unit proposed by Boca would require an expenditure in excess of $1,690,000. Adding necessary instrumentation and a backup pump could add an additional $50-60,000. At hearing, Boca sought to minimize the significance of its underestimation by offering the testimony of an expert in medical equipment planning, cost estimating and procurement. That expert, Richard Drinkwine, was most credible and found, upon review of the Boca proposal that it was wanting in both equipment and cost. In his opinion a more reasonable cost to purchase moverable equipment would be $1,027,267, and a reasonable estimate for the furniture needs of Boca would be $92,257. This estimate was based on the assumption that Boca would not initially equip its second operating room, exam rooms or recovery rooms. To do so, would add an additional cost of $411,329 (movable and fixed equipment) for the second operating room and $160,000 to equip the recovery areas. Adding needed instrumentation and a back up pump would bring Boca's equipment costs to over $1,740,000. 9/ While Boca underestimated its equipment costs, the proof demonstrates that its construction estimate of $6,147,900 was overstated. The major factor which accounts for the overstatement by Boca in its application was an over estimate of the cost to construct the first floor of its addition, which is a covered parking area. In fact, Boca will be able to construct its proposed addition for approximately $5,226,397, or $921,503 less than it estimated in its application. Although Boca could realize a significant savings on construction costs, and those savings would be adequate to almost offset the deficiencies in its equipment budget, the restructuring of its application at this time is not appropriate under the Department's Rule 10-5.010(2)(b). Notably, while the total cost figures might be the same, the additional equipment that is needed to equip Boca's program, and that was omitted from its application, is significant. In addition to Boca's failure to demonstrate the reasonableness of its cost proposal, it is also found that Boca's proposal is oversized and overpriced to meet any demands Boca could reasonably expect to fulfill at any time in the foreseeable future. First, each of the two operating rooms proposed by Boca are over 1,100 square feet in size. Such size is more than twice the size reasonably needed to accommodate open heart surgery. Second, areas in the central core and lounges are also larger then needed. More significantly, Boca is proposing a four-bed recovery area and ten dedicated SICU beds. Even assuming there is a need for an additional open heart surgery program in the district, Boca could never reasonably expect to capture sufficient market share to justify the capital expenditure necessary to warrant a 10-bed SICU. Ten SICU beds could handle between 900 and 1400 open heart patients in a year. There are no programs anywhere in South Florida, no matter how mature or well respected, that have achieved utilization close to that level, and it is not reasonable for Boca to expect to achieve such volumes. Significantly, a portion of the capital cost for Boca's project would, under the present system, be passed along to the federal government by the capital cost pass through. By this mechanism, over $3,500,000 of Boca's project would ultimately be reimbursed to the hospital in the form of Medicare payments. Compared to Boca's cost proposal, St. Mary's is modest. Here, the schematics submitted by St. Mary's with its application and omissions response depict the existing surgical suites at St. Mary's and the minor renovations necessary to convert an existing room into the proposed open heart surgery suite. As proposed, St. Mary's program would have a dedicated open heart surgery suite, as well as a backup operating room. Recovery would be accommodated in its existing 16-bed ICU. In its application, St. Mary's estimated a maximum project cost of $850,000 to remodel its existing facility and equip its proposed open heart surgery program. That figure included up to $100,000 for remodeling costs, and up to $700,000 for equipment costs. St. Mary's estimates are reasonable and cost effective whether its program is dedicated to adult and pediatric open heart surgery service or simply adult services. Significantly, the equipment needed to perform open heart surgery on adults and pediatrics is the same except for some special instruments. That cost, at less than $25,000, is nominal and does not affect the reasonableness of St. Mary's estimates. As proposed in its application, Martin would construct 2,800 square feet of new space at its facility for the purpose of implementing an open heart surgery program. The location of the project is the hospital's first floor adjacent to both the cardiac catheterization laboratory and the existing surgical suites. This location will provide rapid access for cardiac catheterization emergencies requiring open heart intervention and will share common areas with the existing surgical suites, minimizing additional construction and project cost. It is also proximate to a 9-bed surgical intensive care unit. Of the eight existing operating rooms at Martin, two are large enough to serve as backup open heart operating rooms in the event of an emergency, but Martin has not proposed to establish, or budgeted the necessary equipment to establish, a backup operating room. Martin, like St. Mary's, proposes a modest expenditure, compared to Boca, for the initiation of its open heart surgery program. In this regard, Martin's application estimates its total project cost at $1,239,029. That figure includes a total construction cost budget of $796,669, and an equipment budget at $375,360. Martin's costs and methods of proposed construction are reasonable. While the proof demonstrates that approximately $411,000 is a reasonable cost to equip an open heart surgery suite, it also demonstrated that Martin currently has on hand some necessary equipment, such as cell-savers and heating-cooling machines. Under such circumstances, Martin could reasonably equip its program within its $375,360 budget. It could not, however, equip a backup operating room within such budget, and without a backup operating room could not reasonably expect to be able to handle 500 open heart cases a year, as required by rule 10-5.011(f)3d, given the need to back up its cardiac cath program. The immediate and long-term financial feasibility of the proposal. To assess the financial feasibility of the project, Boca's pro forma of income and expense, contained within its application, projects 192 patients during the first year of operation of its open heart surgery program and 211 patients during the second year. Projected charges for both years are based on $55,430 for DRG 104 and $41,942 for DRG 106 with an average length of stay of 10 days. Payor class mix is estimated to be as follows: Medicare 70 percent, Medicaid 0 percent (nominal), insurance 25 percent, other 3 percent, and indigent 2 percent. Net revenue over expenses for year one is projected to be $1,303,312, and for year two to be $1,597,959. Boca's proposed charges, utilization levels, and payor mix are reasonable. However, its pro forma contained unreasonable assumptions regarding average length of stay, total deductions and expenses. 10/ At hearing, Boca made no effort to defend the unreasonable assumptions it had presented to the Department through the pro forma contained in its application. Rather, conceding the unreasonableness of its assumptions, it sought to minimize their import through the testimony of Rufus Harris, an expert in health care finance and accounting. Such objective was not, however, attained. Mr. Harris, employed during the course of these proceedings, actually prepared a completely new pro forma for the Boca program. That pro forma significantly changed Boca's average length of stay from 10 to 16 days; significantly reduced the number of full time equivalents (FTEs) in open heart surgery, recovery and the surgical intensive care unit (SIC) from 39.3 to 24.1; increased the number of support FTEs from 25 to 30 or 32; increased the cost per FTE in the open heart surgery program by $800; increased the cost for each support FTE by $14,000; included the indigent care assessment ($68,000), utility cost ($108,000) and malpractice insurance cost ($17,000) that had been omitted from the application; increased the supply cost by $618,000; and reduced deductions from revenue by $186,000. But for the charges, utilization levels, and payor mix, Mr. Harris' pro forma is a complete revision of Boca's application pro forma, and demonstrates that such pro forma was not based on reasonable assumptions. Although not based on reasonable assumptions, Mr. Harris opined that such failing is not material since Boca's pro forma, like his pro forma, calculated a profit. Mr. Harris' opinion is rejected. The bottom line profit he derived was based on a substantial change in Boca's proposed program. Such slight of hand does not address the financial feasibility of the program Boca proposed in its application. Boca's proposal, developed through the testimony of its construction, equipment and financial experts, bears little resemblance to its initial application, and must be rejected as an impermissible amendment. Boca's application proposed two operating rooms. As such, Boca could facially handle at least 500 open heart surgery cases per year. As amended, with one operating room, Boca could not reasonably expect to attain such level of operations, given the need to back up its cardiac catheterization program, contrary to Rule 10- 5.011(1)(f)3d. As proposed, Boca's open heart surgery program would include recovery areas and a 10-bed SICU, fully staffed. As amended, the SICU would be staffed with one FTE and other staffing substantially reduced. Through downsizing, Boca would presume to significantly alter its proposal, and thereby demonstrate the reasonableness of its cost and financial feasibility projections. Such was not, however, the proposal submitted to the Department for review, and it cannot be permitted, at this stage of the proceedings, to amend its proposal in such material respects. Accordingly, based on the record, Boca has failed to demonstrate the financial feasibility of its proposal. 11/ St. Mary's pro forma of income and expenses projects 200 adult and 10 pediatric open heart surgery cases during its first year of operation, and 240 adult and 20 pediatric during its second year of operation. Separate pro formas describe the adult and pediatric parts of St. Mary's proposal. Actual charges proposed by St. Mary's will vary by DRG, as will average length of stay. The weighted average charges are, however, projected to be $38,000 for adult services and $43,025 for pediatric services during its first year of operation, and $39,900 for adult services and $45,176 for pediatric services during its second year of operation, based on a 10 day average length of stay. Payor class mix for adults is estimated as follows: Medicare 50 percent, Medicaid 7 percent, self pay/commercial 40 percent, and indigent 3 percent. Payor class mix for pediatrics is estimated to be as follows: Medicare 0 percent, Medicaid 50 percent, self pay/commercial 40 percent, and indigent 10 percent. Net revenue over expenses for its adult program is projected, on an incremental cost basis, to be $2,297,566 for year one, and $2,885,102 for year two. Net revenue for its pediatric program is projected, on an incremental cost basis, to be $62,326 for year one, and $224,797 for year two. St. Mary's proposed charges, average length of stay, utilization levels, payor mix, as well as its assumptions regarding total deductions and expenses are not reasonable. St. Mary's proposed charges were not shown to be reasonably achievable. Rather, where, as here, a facility's charge structure is based on consumption of services, the increased costs associated with an open heart program, discussed infra, would translate into significantly higher charges than those proposed by St. Mary's. St. Mary's application contains no data to reasonably support its conclusions that it will achieve 200 adult cases in year one and 240 adult cases in year two, nor did the proof it offered at hearing demonstrate such potential. Rather, the persuasive proof demonstrated that St. Mary's could not reasonably expect to attract more than 80 adult open heart cases in its first year of operation, and that it would not even be able to attract 200 open heart cases during its third year of operation. Notably, the area St. Mary's proposes to serve is currently adequately served by two open heart surgery programs. St. Mary's pro forma contains several other serious flaws. First, its gross patient revenues are driven by an average length of stay of 10 days. Such assumption is unreasonable, and St. Mary's could more reasonably expect an average length of stay of 15-17 days, with significantly higher expenses associated with the greater consumption of resources occasioned by such increased length of stay. Second, St. Mary's payor mix is significantly understated for Medicare. Here, the proof demonstrates that St. Mary's could reasonably expect to achieve a 68-70 percent Medicare utilization rate, as opposed to the 50 percent it projected. Such increase would significantly reduce its self pay/commercial, assuming its Medicaid and indigent utilization levels are to be accorded any credence, and significantly increase its deductions from revenue. Third, St. Mary's pro forma significantly understated expenses, primarily with regard to supplies and FTEs. Had St. Mary's reasonably calculated its average length of stay at 15-17 days, its expenses for supplies and FTEs would have been substantially higher. Additionally, St. Mary's application only addresses the need to tap incremental FTEs in the nursing area, whereas initation of an open heart program would have a tremendous impact on all services in the hospital, such as lab, pharmacy and social services, with attendant higher costs. Based on the opinion of Richard Cascio, an expert in health care finance, which is credited, St. Mary's proposal is not financially feasible in the long term. 12/ Regarding St. Mary's pediatric open heart program, the proof, as heretofore found, fails to support is utilization projection of 10 cases in year one and 20 cases in year two. Therefore, St. Mary's has failed to demonstrate the long term financial feasibility of that program operated, as proposed, concurrently with an adult program. As a stand alone program, neither St. Mary's application nor the proof at hearing reasonably address such a prospect. However, since the pediatric program was not shown to be financially feasible with the adult program bearing a significant portion of operating expenses, it must also be concluded that the pediatric program would not be financially feasible were it to carry all operating expenses. Martin's pro forma of income and expenses is predicated upon 148 adult open heart surgery cases during its first year of operation, and 195 cases during its second year of operation. Actual charges proposed by Martin will vary by DRG, as will average length of stay. Projected average charges are, however, projected to be $41,000 during its first year of operation and $43,080 during its second year of operation, based on a 15.7 day average length of stay. Payor class mix is estimated as follows: Medicare 63.0 percent, Medicaid 2.5 percent, private pay/commercial insurance 32.5 percent, and free care 2 percent. Net revenue over expenses is projected to be $260,000 for year one and $337,000 for year two. Martin's utilization levels, proposed charges, payor mix, and average length of stay are reasonable. Martin's pro forma did, however, contain some unreasonable assumptions regarding expenses, primarily staffing costs. 13/ Martin's pro forma estimates staffing costs based on the manpower requirements (FTEs) and salaries set forth in Table 11 of its application. It further calculates fringe benefits at 20 percent of salaries. Notably, however, the number of people needed to staff a program at a given FTE level is significantly higher than the raw FTE number. Accordingly, since Martin projected its salary expense and fringe benefits based on FTE's, its expenses associated with those items are understated. Further, the salaries Martin proposed in Table 11 for its operating room nurses are entry level salaries and Martin could not reasonably expect to recruit experienced open heart surgery personnel at such rates. Nor is its projected salary for a perfusionist, at $59,551 reasonable. A more reasonable figure would be in excess of $75,000. Even though the proof offered in opposition to Martin's application did demonstrate that Martin's assumptions regarding salary expenses were understated, it failed to demonstrate that Martin could not meet current market demands and still be profitable. Rather, Martin's proposal, while generating a lower bottom line, will still be profitable if such increased expenses are considered, and it is financially feasible in the long term. While each of the applicant's have demonstrated the immediate financial feasibility of their projects, by demonstrating the availability of funds for project accomplishment and operation, only Martin has demonstrated the long term financial feasibility of its proposal. Other criteria bearing on capital expenditure proposals for the provision of new health services to inpatients. In cases of capital expenditure proposals for the provision of new health services to inpatients, Section 381.705(2), Florida Statutes, requires that the Department reference each of the following in its findings of fact: That less costly, more efficient, or more appropriate alternatives to such inpatient services are not available and the development of such alternatives has been studied and found not practicable. That existing inpatient facilities pro- viding inpatient services similar to those proposed are being used in an appropriate and efficient manner. In the case of new construction, that alternatives to new construction, for example, modernization or sharing arrangements, have been considered and have been implemented to the maximum extent practicable. That patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. In the instant case, none of the foregoing criteria can be answered in the affirmative. Rather, the proof demonstrates that less costly, more efficient or more appropriate alternatives currently exist through increased utilization of existing facilities. It further demonstrates that two of the existing three providers have not yet attained a 350 case per year level of operation, and that their services are therefore not yet being used at an appropriate level. Existing utilization levels and capacity further demonstrate that patients will not experience any serious problems in accessing such services. Finally, the applicants further failed to demonstrate that they had considered alternatives to new construction and had implemented them to the maximum extent possible. In the case of all applicants' there is no proof of any effort to initiate sharing arrangements. On the matter of Boca's complaints regarding delays experienced in effecting patient transfers by ambulance, as well as the inadequacy of such ambulances and their breakdowns, it offered no proof that it had investigated other ambulance services or its ability to operate its own service and found them impractable. Notably, such services are an item over which Boca has significant control, and its failure to investigate alternatives in this regard evidences the insignificance of any such problem. The criteria on balance. In evaluating the applications at issue in this proceeding, none of the criteria established by Section 381.705, Florida Statutes, or Rule 10- 5.011(1)(f), Florida Administrative Code, has been overlooked. The applicants' failure to demonstrate need, either numeric or not normal circumstances, as well as their failure to demonstrate compliance with Section 381.705(2), Florida Statutes, is, however, dispositive of their applications, and such failure is not outweighed by any other or combination of any other criteria. Further, even were the fixed need pool accorded the deference suggested by the Department, the other indicators of need subsumed within other criteria would dispel such illusion, and again compel the conclusion that there is no need in this case. Had numeric need been demonstrated, and the need requirements encompassed within section 381.705(2) satisfied, the proof would still fail to support an award to Boca or St. Mary's. Rather, among the competing applicants, Martin was shown to best satisfy the pertinent review criteria on balance and would, under such circumstances, be the favored applicant.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered denying the applications of Boca, St. Mary's and Martin for a certificate of need to establish an open heart surgery program in District IX. RECOMMENDED in Tallahassee, Leon County, Florida, this 15th day of March 1991. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March 1991.
The Issue Whether this case presents "not normal circumstances" that lead to award to St. Anthony's Hospital, Inc., of a certificate of need for an Open Heart Surgery program?
Findings Of Fact The parties and existing programs in District 5. St. Anthony's Hospital, Inc., the applicant for CON No. 7418 (the subject of this proceeding), is a not-for-profit corporation. Its facility, St. Anthony's Hospital, at which the adult open heart surgery program would be operated if CON No. 7418 were granted, is a 427-bed licensed general community hospital providing adult acute medical services in surgery, psychiatry and obstetrics. Located south of Ulmerton Road in Pinellas County, (generally considered "South Pinellas County,") St. Anthony's also provides home health care, family medicine clinics, outreach education, health screening and occupational health. Also located in South Pinellas County are Bayfront Medical Center, All Children's Hospital, and Northside Hospital. Northside is not a party to this proceeding although it recently received approval for a CON to provide open heart surgery services. Northside is located 6-1/2 to 7 miles from St. Anthony's and provides services in the same service area. Bayfront Medical Center, Inc., is one of two intervenors in this proceeding. Its facility, Bayfront Medical Center is a 518-bed, acute care, not-for-profit hospital located within the limits of the city of St. Petersburg and 1.7 miles from St. Anthony's. It offers cardiac, cancer and emergency services as well as a Level II trauma center. Bayfront also maintains a large women's and children's program, a rehabilitation center and a neurology program. Its cardiology program includes adult and pediatric cardiac catheterization, angioplasty and open heart surgery. But the open heart surgery program is shared with All Children's Hospital. Pre-operative and post-operative patient care is Bayfront's responsibility. The actual surgery takes place on the premises of All Children's. All Children's Hospital is a research hospital affiliated with the University of South Florida College of Medicine. Most importantly, and certainly most pertinent to this case, it is a dedicated Class II pediatric specialty hospital, one of two pediatric specialty hospitals in Florida, and one of only 47 in the nation. It provides, therefore, primary, secondary and tertiary care for children, in addition to the open heart surgery services it provides adults. Its cardiac surgery program was grandfathered under CON law to begin children's cardiac surgery in 1975. At the time of the grandfathering, All Children's was asked by state officials to consider adult cardiac surgery services as well. The hospital trustees and medical staff agreed and began a combined pediatric/adult open heart surgery program in 1976. As explained, above, the adult program is shared with Bayfront. All Children's Hospital is not a party to this proceeding. Largo Medical Center, Inc.'s facility, Largo Medical Center is a 256- bed, acute-care hospital specializing in cardiology and open heart surgery. Largo, the other intervenor in the proceeding, is located in AHCA's District 5 but outside South Pinellas County, as are two other open heart surgery programs: a program at Morton F. Plant Hospital in Clearwater and a program at HCA Bayonet Point/Hudson Medical Center located in Hudson in Pasco County. Morton F. Plant Hospital and HCA Bayonet Point/Hudson Medical Center are not participants in this proceeding. The Agency for Health Care Administration is the single state agency authorized by Section 408.034(1), Florida Statutes, to issue or deny certificates of need, "written statements ... evidencing community need for a new ... health service [such as an adult inpatient cardiac catheterization program.]" Section 408.032(2), Florida Statutes. Standing of the Intervenors. Over half of Largo's open heart surgery patients originate from St. Anthony's defined service area and 35 percent from South Pinellas County. If St. Anthony's achieves its projected volume, Largo likely will lose 35 percent of its open heart surgery patients in the third year of operation. A loss of that number of patients will contribute to a substantial loss of revenue to Largo. As concerns Bayfront's standing to intervene in this proceeding, St. Anthony's purpose in seeking a CON for an open heart surgery program is to obtain authorization for a program to take the place of the All Children's/Bayfront adult open heart surgery program. As counsel for St. Anthony's made clear in oral representation during hearing, whether made clear from the face of St. Anthony's application or not, the application is a "replacement application for Bayfront/All Children's [open heart surgery program]." (Tr. 208.) Filing of the CON application Under cover of a certification of its authorized agent dated September 17, 1993, St. Anthony's Hospital, Inc., filed an application for Certificate of Need 7418 with the Agency for Health Care Administration. The application seeks expansion of existing cardiology services at St. Anthony's health care facility in Pinellas County to include an on-site program for adult open heart surgery. d . Background This is not the first time St. Anthony's has initiated proceedings to obtain a CON for open heart surgery. It has filed applications before because of its concern that South Pinellas County is not being served appropriately by the adult open heart services program shared by Bayfront Medical Center and All Children's Hospital. In the application in this case, St. Anthony's describes its previous attempts in this way: ... St. Anthony's has on eight occasions, since 1987, applied for a Certificate of Need to provide open heart surgery services. Each application has either been denied, or was withdrawn by St. Anthony's based on represent- ations St. Anthony's received that All Children's/Bayfront shared program was adequate and appropriate to meet the needs of south Pinellas adult open heart patients. St. Anthony's has historically deferred to All Children's so as not to unnecessarily duplicate services. St. Anthony's Ex. 1, p 27. In CON application 7396, filed July 14, 1993, All Children's Hospital requested AHCA to allow the hospital "to discontinue services to the adult cardiac surgery population effective June 30, 1994 ...". St. Anthony's Ex. No. 20, attachment at p.7. The reason for the request was that All Children's had experienced and projected to continue to experience growth in its pediatric surgery caseload. Since "All Children's mission and legal responsibility lies with Florida's children ... the [hospital's] obvious difficulty ... [was] how to continue dealing with a growing pediatric patient load with decreasing availability of facilities." Id. At the same time, although not increasing as rapidly as children's surgery, the growth of the caseload for adult open heart surgery, as of the summer of 1993, was continuing in St. Petersburg. As a licensed pediatric hospital, All Children's opined in CON Application 7396, [W]e are unable to expand the adult program in even a moderate fashion and are unable to provide the true continuum of adult cardiac care that adult cardiologists and surgeons believe to be needed in the community. Only an adult licensed hospital can provide those services and allow for future growth. Id., at 8. With regard to the growing pediatric patient load threatened by decreasing availability of facilities, the application projected, "a true crisis within one year in the surgery, SICU area if adjustments are not made to alleviate the situation." Id. The crisis, however, did not materialize. As of June 20, 1994, nearly one year after the filing of the withdrawal application, the President and Chief Executive Officer of All Children's Hospital was of the opinion that there was not a crisis in the care of pediatric patients. Nor was there a crisis in the care of adult open heart surgery patients. In fact, adult open heart surgery patients were receiving very high quality care within one year of the projection of crisis made in the application. The application to terminate the open heart surgery program was withdrawn prior to June 20, 1994. All Children's withdrew the application in response to wishes expressed in the community that the program be continued. Nonetheless, St. Anthony's viewed the representations made by All Children's in CON application 7396 to "impeach any continued suggestion by All Children's or Bayfront that the existing shared services agreement is a normal or appropriate setting for adult open heart services." St. Anthony's Ex. No. 1, pg. 27. It filed, therefore, the application that initiated this proceeding. Transfer Stress and Limitations of the All Chidren's/Bayfront OHS program. After pre-operative care at Bayfront, adult open heart surgery patients are transferred through an enclosed corridor connecting Bayfront to All Children's. The same corridor is used to transfer the patients back to Bayfront for appropriate post- operative care following the surgery and intensive care at All Children's. Patients typically suffer stress when being transferred from one institution to another. They certainly suffer "transfer stress" when being transferred from St. Anthony's to Bayfront for open heart surgery in the All Children's/Bayfront program, just as they would suffer stress in transfers from Bayfront to St. Anthony's were St. Anthony's application to be granted and were the St. Anthony program to take the place of the All Children's/Bayfront program. Typical transfer time, however, between Bayfront and All Children's is only about five minutes. Most patients do not realize they are going from one institution to another. Although the arrangement is less than ideal, it is doubtful that open heart surgery patients suffer stress due to the transfers from Bayfront to All Children's and back again. There are, however, some drawbacks with regard to angioplasty patients in the All Children's adult program. Ambulation of angioplasty patients cannot be appropriately observed postoperatively at All Children's because there are not telemetry facilities available at All Children's for observation. There are such facilities at Bayfront and the patients may be observed there post- operatively once out of the intensive care unit at All Children's. Carlos M. Estevez, M.D., is a cardiologist with St. Petersburg Medical Clinic with active privileges at St. Anthony's, Bayfront, All Children's and Edward White Hospital. Beds have been unavailable postoperatively for adult therapeutic anigoplasty patients of his on occasion at All Children's. The patients have been required to be transferred to Bayfront or back to St. Anthony's, with French sheaths in their groin, a less- than-ideal situation. Dr. Estevez' therapeutic anigoplasty patients requiring open heart backup at All Children's are typically discharged from All Children's after spending the night in the intensive care unit. For the average angioplasty patient, intensive care services are an overutilization of services. Dr. Estevez believes "crisis" would be a fair term to describe the current situation for his angioplasty patients in the All Children's/Bayfront program. Not Normal Circumstances Part of CON review is to look for factors the application shows to be "beyond the norm," or "any unusual circumstances." AHCA's interrogatory answer responded with regard to defining "not normal circumstances," in this way: There is no definition for "not normal circum- stances." In the absense (sic) of a projected numeric need pursuant to a fixed pool publication, an applicant may demonstrate valid need, justi- fiable evidence of situations or occurrences in a service area which are not accounted for such as access problems, which may support approval. St. Anthony's Ex. 7, p. 9. Circumstances of the All Children's/Bayfront Program. As a dedicated Class II pediatric specialty hospital, All Children's, alone, cannot provide the continuum of care needed by adult open heart surgery patients. Its provision of services, as stated above, is limited to surgery and postoperative intensive care. Other services in the continuum of care required by adult open heart surgery patients include admission to an emergency room, and pre-operative coronary care as well as post-operative care (other than intensive care) all the way through cardiac rehabilitation. The components of the continuum other than the actual surgery and post-op intensive care are provided by Bayfront and other hospitals. Despite All Children's inability to provide "continuum of care," by itself, to adult open heart surgery patients, the care provided the open heart surgery patient in the All Children's/Bayfront program is of high quality. All Children's physical site is limited for future growth both as to the adult open heart program and its pediatric programs. The physical outer limits of the hospital building are right on the property line, "all the way around. It has no room to expand." St. Anthony's Ex. No. 20. But for physical limitations, All Children's pediatric services would expand because the need for expansion in the pediatric program exists. The inability of the pediatric programs to expand compromises All Children's mission: pediatric care in a hospital dedicated to pediatrics. The adult open heart surgery program, if withdrawn, would free All Children's somewhat for further pediatric program growth both as to resources and space. But All Children's is no longer trying to withdraw from the program. All Children's board of trustees believes that only an adult licensed hospital can provide the continuum of care needed for adult open heart surgery patients and allow for future growth. Moreover, it is not possible to put together a competitive adult open heart pricing structure for the continuum of care that one hospital could provide when adult open heart surgery patients are being transferred from All Children's to and from other hospitals in order to provide the full continuum of care. AHCA's Response to the Application. AHCA's response to the application was denial based on a determination of no need to support the application. After review, AHCA determined that the application did not demonstrate that St. Anthony's could support sufficient volume even were the All Children's/Bayfront program to become non-operational. There was, however, an even more fundamental objection to granting the application on the part of the agency. As Elizabeth Dudek, Chief of the Certificate of Need and Budget Review sections of the agency, explained with regard to St. Anthony's premise that the application seeks to have its program "replace" the All Children's/Bayfront adult open heart surgery program, I don't understand that premise. I don't understand it because, one, the All Children's/ Bayfront program is still operational. There is no indication that the All Children's/Bayfront program has somehow indicated that it would relinquish its program volume to St. Anthony's. dditionally, ... by law they wouldn't be able to [accomplish a transfer] through the CON program, you can't transfer [or replace] a program ... Tr. 1534, ll. 2-12. Need. For those in need of open heart surgery services in South Pinellas County, there is another facility in South Pinellas County at which the services can be obtained: Northside. As for all of AHCA District 5, there are other facilities at which open heart surgery services are available. There is no evidence, despite the inability of the All Children's/Bayfront adult program to expand, that the needs of those requiring high quality open heart surgery services in South Pinellas County or AHCA District 5 are going unmet.
Findings Of Fact St. Anthony's is a 434 bed nonprofit acute care hospital located in St. Petersburg, Florida. On September 15, 1987, St. Anthony's filed an application for a CON to establish and implement an open heart surgery program in its facility. The Department filed a notice of intent to deny the application in January, 1988, and thereafter, St. Anthony's filed a Petition for Formal Administrative Hearing to contest the denial. Intervenors, All Children's and Bayfront sought and were granted leave to intervene in the proceeding. By Pre-hearing Stipulation, the parties have agreed to the following Findings of Fact: Each of the parties has a record of providing good quality of care. The licensure and accreditation of each party is not at issue and need not be proven. The equipment proposed by St. Anthony's in its application is adequate and the costs projected for that equipment are reasonable. The staffing levels and related salaries as proposed by St. Anthony's in its application are appropriate and reasonable. The architectural plans and related costs for St. Anthony's proposed project are appropriate and reasonable. The total project costs proposed by St. Anthony's in its application are appropriate and reasonable. St. Anthony's has the ability to finance the project costs. Projected revenues and expenses set out in the pro forma financial projections by St. Anthony's are reasonable. St. Anthony's presently provides a full range of acute, general, medical, and surgical services, and surgical subspecialties including neuro- surgery, maxillofacia surgery, thoracic surgery, and peripheral vascular surgery. It also offers broad psychiatric, substance abuse, and obstetrical services and a full time emergency room capability. It also provides cardiology services including cardiac catheterization. It has a historic commitment to cardiology services, establishing a cardiac catheterization lab in 1961, a coronary care unit in 1968, and a holter monitor service in 1973. In 1975, it established the community's first echocardiography laboratory, and as early as 1965, seriously considered establishing an open heart surgery program at the facility. This program was not, however, developed at the time. St. Anthony's continued its involvement in the area of cardiography and its program covers a full array of diagnostic services including echocardiography, nuclear cardiography, and basic electrocardiography, and possesses a magnetic resonance imaging unit which can be used in the diagnosis of heart problems. Additionally, it has a well equipped vascular laboratory and peripheral vascular disease program as well as a cardiac rehabilitation program and a wellness center that is aimed at early identification and prevention. St. Anthony's is also the site of the Rogers Heart Foundation, a nonprofit, privately funded foundation established in the late 1950's to perform research, education, and clinical diagnostic studies in the field of cardiovascular diseases. As a result of the activities of the foundation, St. Anthony's is well known by physicians in the area as a center for cardiac training and expertise, and until recently, was a participant with Emory University in that institution's cardiac fellowship training program. St. Anthony's has a long tradition in the service area for providing indigent services and is one of the major providers of charity and indigent care in Pinellas County. This care is provided through direct free care to patients as well as discounted charges and the write-off of bad debts. It also provides services through Medicaid and through write-off of Medicare deductible and coinsurance portions of patients' charges. All Children's Hospital is a 113 bed children's hospital located in St. Petersburg approximately two miles from St. Anthony's. It is a full service tertiary facility which serves as a referral center for children from throughout the State of Florida and currently has an approved CON for an additional 55 beds. Following construction, which is due to begin in February, 1989, All Children's will have 6 operating rooms, 2 cardiac catheterization labs, and 5 additional surgical intensive care unit beds for a total of 13 ICU beds. At the present time it has 2 operating rooms used for open heart surgery and 2 cardiac catheterization labs. The hospital has a strong affiliation with the University of South Florida College of Medicine in Tampa. All Children's open heart program began several years after the hospital opened its first cardiac catheterization lab for children in the early 1970's. This came about when several cardiologists whose patients were primarily adult, and who were unable to utilize the facilities at the Rogers Heart Foundation because of its closed status, asked to make use of All Children's cardiac catheterization unite. Since this was consistent with All Children's efforts to increase the quality of its program through higher volume, All Children's began making its services available to adults admitted to Bayfront Hospital, a neighboring facility, with cardiac catheterization done by the patient's cardiologist in the All Children's facility. All Children's currently has 3 pediatric cardiologists and approximately 12 to 15 adult cardiologists on staff. The primary cardiac surgical team consists of Drs. Daicoff and Botero. At the present time, approximately 34% of the adult and pediatric patients treated at All Children's are Medicaid patients. Uncompensated indigent care provided at All Children's ranged from 16.52% in 1986 to 18.03% in 1987 and Medicaid patient days ranged from 30.4% in 1986 to 34.2% in 1987. Bayfront's uncompensated care was 22.15% in 1986 and 23.93% in 1987 while Medicaid patient days for that facility were 7.6% in 1986 and 8.9% in 1987. St. Anthony's devoted 1.2% of its total patient days in 1986 to Medicaid patients and 2.3% of it's total patient days in 1987. Bayfront is a 518 bed not-for-profit, full service acute care hospital located in St. Petersburg adjacent to All Children's. It was founded prior to 1968 as Mound Park Hospital, owned by the City of St. Petersburg, but in 1968, separated from city ownership and became known as Bay front Medical Center. Its mission is to provide care to all citizens in St. Petersburg and the surrounding area regardless of their ability to pay, and it offers a full range of services with the pediatric component provided by its neighbor, All Children's. It has 450 physicians on medical staff. Bayfront serves as a teaching hospital working in conjunction with the University of South Florida Medical School and providing a residency program in Pinellas County covering the entire spectrum of health care training at the facility. Bayfront runs a comprehensive cancer service approved by the American College of Surgeons and its obstetrical and gynecological women's service accounts for approximately 4,500 births per year. With All Children's, it participates in a prenatology program for high risk mothers and infants as part of a regional care program. Bayfront provides helicopter emergency coverage for its trauma center which averages 50,000 emergency room visits per year. The trauma service, staffed on a 24 hour a day basis by a full complement of surgeons, includes open heart surgery capability available for trauma related heart surgery needs. All Children's and Bayfront are connected to each other by an enclosed passageway. Taken together, the primary service area of the three hospital parties to this action is the southern half of Pinellas County up to approximately Ulmerton Road. Because of their geographical proximity to each other and their diverse but complementary populations, All Children's and Bayfront have developed working programs on a shared service basis in an effort to hold down the cost of health care in the community and to avoid unnecessary duplication of service. The Department has recognized and continues to recognize the shared nature of the All Children's/Bayfront open heart surgery program and the Boards of Directors of both institutions, as early as 1975, agreed to share open heart surgery services. The shared program for cardiac catheterization and open heart surgery are now known as the "Cardiac Center of Excellence". Under the "Center" concept, diagnostic services are shared. All Children's Hospital's previously described cardiac catheterization laboratory and its non-invasive diagnostic study equipment is complemented by Bayfront's cardiac catheterization laboratory and its non-invasive diagnostic services including EKG, 2-D echo color flow doppler, magnetic resonance imaging, holter monitoring, and stress testing. Not only are diagnostic services shared by the two facilities but therapeutic services are shared as well. All Children's provides 2 open heart surgery operating suites, percutaneous transluminal coronary angioplasty, laser angioplasty, and intensive care units for children and adult post operative patients. Bayfront provides laser angioplasty and its cardiac catheterization laboratory has the capability to do emergency angioplasty procedures. Once these have been accomplished, Bayfront has a coronary care unit, a surgical unit for post operative patients, and a progressive care unit for its adult patients progressing toward discharge. Transportation services are also shared as are rehabilitation services. All Children's mobile intensive care unit is available to provide ground transportation for adults and children and it has entered into appropriate cardiac transportation protocols with outlying hospitals. Bayfront provides helicopter transportation for children and adults to its trauma center and, too, has appropriate cardiac transportation protocols similar to those entered into by All Children's. This joint program, which has grown to provide up to date, sophisticated, high quality cardiac care to both adults and children, minimizes operating costs and capital investment. An entire range of cardiac services is available with highly trained physicians and professional staff and state of the art equipment and facilities to both adult and pediatric patients. When an adult patient requires open heart surgery at the "Center", he is admitted to Bayfront the day prior to surgery where preliminary preparation is accomplished. On the day of surgery, the patient is prepared and Bayfront personnel transport the patient through the underground connection to All Children's where the actual surgery takes place. Subsequent to the surgery, the patient will normally be kept over night at All Children's in a surgical ICU whereupon, barring complications, he is then transferred by Bay front personnel back to Bay front to continue recovery in a cardiac surgical ICU. The remainder of the recovery period, usually lasting about one week for an uncomplicated case, is accomplished at Bayfront, and upon completion of recovery, the patient is discharged from that hospital, returning there for out patient treatment in Bayfront's cardiac rehabilitation program. In an emergency situation, when an adult patient is presented directly to All Children's for angioplasty, All Children arranges with Bayfront to admit the patient there within 24 hours. For non-Medicare patients, each facility bills the appropriate insurance carrier or patient for the charges for services rendered by each hospital. The Medicare and Medicaid reimbursement mechanisms by which All Children's and Bayfront are paid for providing open heart surgery differ substantially from the norm. The Health Care Finance Administration, which administers thee Medicare program recognizes the Bayfront/All Children's shared open heart surgery program for adults and has structured its reimbursement mechanism in an appropriate manner to accommodate that shared status. The normal method of fixed DRG payments is not followed. Because of accreditation requirements, the process becomes somewhat complicated in that the patient must be discharged from one facility and admitted to the other for surgery and vice-versa for recovery. However, representatives of both facilities claim, and there is no evidence to the contrary, that this procedure does not impose any burden on the patient or his family nor does it affect the quality of care. In fact, under the program, both facilities have been able to maintain an excellent quality of care. The physicians who practice there and who testified for St. Anthony's, indicated some scheduling problems relating to the availability of operating rooms at a time desired by the surgeon, but these problems have not affected quality of care and are being resolved through more acute scheduling and the addition of the 2 new surgical suites at All Children's. Between the two facilities, there are 15 cardiologists on both staffs who refer open heart patients for surgery. There are also 3 cardiovascular surgeons on staff at the two facilities, all of whom are members of the same physician group which exclusively performs open heart surgery under the shared program and which provides backup for all angioplasties in the "Center" program. One of these, Dr. Daicoff, indicated that although he would prefer the development of a single state of the art heart institute to serve the future needs of southern Pinellas County, he and his group would provide angioplasty backup as well as do surgery at St. Anthony's if the capability were approved and if he could be convinced that the St. Anthony's program would achieve the same level of high quality currently enjoyed by Bayfront and All Children's. Recognizing that the likelihood of a centralized heart institute is remote, Dr. Daicoff favors the approval of St. Anthony's program. Open heart surgery is currently being performed at two other hospitals in HRS District V, (Pinellas and Pasco Counties). These are the Largo Medical Center and Morton F. Plant Hospital, both of which are located close to the Ulmerton Road dividing line in the center of Pinellas County. These two facilities provide the majority of open heart surgery in the northern portion of Pinellas County and in Pasco County. Nonetheless, an open heart program at Bayonet Point Hospital in Pasco County was approved in December, 1987, not because of numerical need for the project, but because the applicant also sought approval for cardiac catheterization services. In that case, a need was shown for cardiac catheterization services in Pasco County, and a lab at Bayonet Point was approved. Because of the Department rule requiring open heart surgery backup within 30 minutes of a cardiac catheterization lab, no such backup otherwise being available for the Bayonet Point facility, its program was approved as well. The service area for open heart surgery for the three hospital parties to this proceeding is the St. Petersburg, Florida area. At the present time there are no major referrals to All Children's for open heart surgery from outside this area to the adult program operated in conjunction with Bayfront. The adult program at All Children's/Bayfront is centered around southern Pinellas County, an area in which the rate of growth is somewhat constant and not significant. The majority of growth in the county is located in the north end. For the fiscal year ending September 30, 1988, 268 adult open heart surgery procedures were performed at All Children's. During the same period, 160 children's cases were performed. During 1984, 257 adult and 48 pediatric open heart surgeries were performed at All Children's; during 1985, 215 adult and 75 pediatric; during 1986, 258 adult and 46 pediatric; and during 1987, 268 adult and 72 pediatric. If all theatres at All Children's were operated on a capacity basis, as many as 520 open heart procedures could be accomplished. This would require performing 2 surgeries per day, 5 days a week, 52 weeks per year. At the present time, nowhere near this load is being carried. St. Anthony's contends this would not be realistic. However, additional capacity exists at All Children's to accommodate increased open heart surgery if required. The proper time frame for determining the "actual use rate" referenced in the Department's rule for determining need assessment for new open heart surgery services is July, 1986 through June, 1987. During that period, 299 procedures, including pediatric, were performed at All Children's with 432 total procedures being performed at Largo and 392 at Morton F. Plant. This constitutes a total of 1,123 open heart procedures within the District. St. Anthony's contends that open heart surgery procedures by themselves, however, are net the only factor for consideration. Cardiac catheterization is no longer merely a diagnostic procedure but constitutes a place for acute intervention. Cardiac catheterization practice has increased radically and has carried with it an increase in open heart surgeries. St. Anthony's cannot fully implement a cardiac catheterization program by adding angioplasty without the concomitant open heart surgery capability required for the full operation of angioplasty and its related programs. Without an open heart capability at St. Anthony's, it's ability to provide a full array of non- open heart cardiac catheterization services is constrained. It urges that from a medical standpoint, it would be beneficial to the patient to have acute intervention and angioplasty available at that hospital rather than , as is presently the case, disrupting cardiac care and courting the danger of additional coronary problems, the risk of which is increased when a patient must be transported to another hospital for the angioplasty and acute intervention procedures. St. Anthony's asserts that it will lose its reputation, built up over a period of 40 years, for a continuum of quality care if it is not permitted to provide the required surgical background for acute intervention and angioplasty. This is, however, only speculation not supported by any evidence of record. Rule 10-5.011(f), F.A.C. contains a methodology for determining numerical need for new programs and utilization guidelines for existing and approved programs which the Department uses when assessing the need for new open heart surgery services. Under the terms of the rule, the Department is to consider applications in context with applicable statutory and rule criteria and will not normally approve applications for new open heart surgery programs in a service area unless the conditions of subparagraphs 8 and 11 are met. Subparagraph 8 provides a formula for computing the projected number of open heart surgical procedures in the service area for the year in which the proposed open heart surgery program would initiate service. This is to be not more than two years into the future. This number, projected for the target year, is determined by multiplying the actual use rate, (the number of procedures per 100,000 population) in the service area for the twelve month period beginning fourteen months prior to the letter of intent deadline for the batching cycle, by the projected population in the service area in the year service is to be initiated. As was stated above, the proper time frame for determining actual use was July, 1986 through June, 1987, and during that period, a total of 1,123 procedures, including pediatric procedures, were performed at the three existing facilities in District V. Midway through the fiscal year cited above, the total population in District V was 1,082,797, resulting in an actual use rate of 103.7 procedures per 100,000 population. The population projection for the planning horizon is 1,135,819 persons as July 1, 1989, and when the actual use rate of 103.7 per 100,000 is applied, it is anticipated that 1,178 will be performed by July, 1989, the first projected year for the St. Anthony's program, if approved. Once one has arrived at the projected number of procedures in the target year by applying the methodology contained in paragraph 8 of the rule, one turns to the provisions of subparagraph 11 of the rule which provides for no additional open heart surgery programs unless: ... the service volume of each existing and approved open heart surgery program within the service area is operating at and is expected to continue to operate at a minimum of 350 adult open heart surgery cases per year or 130 pediatric heart cases per year; Subparagraph 11b provides: No additional open heart surgery programs shall be approved which will reduce the volume of existing open heart surgery facilities below 350 open heart procedures annually for adults and 130 pediatric heart procedures annually, 75 of which are open heart. In the state agency action report, the Department, in computing need for additional open heart programs, utilized a figure of 1,065 procedures in determining actual use rate which excluded surgeries performed upon children within the district at All Children's. At the hearing, the Department's representative, Mr. Jaffe, agreed that it would be more appropriate to utilize the entire number of procedures, including pediatric, (1,123), in order to develop a more accurate use rate. That is the figure which was used in the analysis in this Recommended Order. From a review of the provisions of subparagraph 11 of the rule, the 350 procedure standard is to be applied once estimated procedures during the target year are established. Since subparagraph 11a(I) provides for service volume of existing and approved programs, utilization of that figure results in a need for 3.4 programs based on the 1989 estimated procedures. Since 3 programs currently exist, (All Children's/Bayfront, Largo, and Morton F. Plant), and Bayonet Point's program has been approved, this results in a .6 open heart surgery program surplus. Even if Bayonet Point's program is not considered, then a need exists for only .4 programs which, when rounded down, is not sufficient to approve an additional program. Turning to the utilization provisions of subparagraph 11, it has been the Department's policy to determine utilization of existing programs for the time period over which the use rate is computed, here, July, 1986 through June, 1987. During that period, only 241 adult open heart procedures were performed at Bayfront/All Children's, and in the fiscal year ending September 30, 1988, the combined program accounted for 268 adult procedures. These numbers are not inconsistent with those used by St. Anthony's when adjustments are made to account for that portion of the total surgery figure which pertains to pediatric patients. They are also below the cutoff figure of 350 adult procedures for all existing or approved facilities in the District. St. Anthony's expert witness, Dr. Kolb, advanced an alternative theory that the "actual use rate" in the methodology established by rule should be adjusted to account for the out-migration of residents of District V to facilities outside the District for open heart surgery. She contended that the actual use rate had to account for all open heart surgeries performed on District residents regardless of where that surgery took place. If that theory were to be applied, then the total number of surgeries for the relevant time frame would have to increased from 1,123 to 1,883, and if that figure is incorporated in the rule computation, utilizing the 350 procedure unit of division, the calculation would show a 2.6 new program need if Bayfront Point were not taken into consideration. If it were, then the need, according to the expert, would be 1.6. Utilizing the Department's policy of rounding up or down as appropriate, even taking into account Bayonet Point, there would be a need for 2 new programs. However, St. Anthony's position is not well taken here. There is nothing in the Department's rule which by any reasonable interpretation can include an adjustment for out-migration. The Department has consistently applied its own rule to include only procedures performed at facilities in the district to determine actual use rate and this interpretation is both reasonable and justified. By statute, the Department is required to apply a uniform methodology. The data base available from all of the various districts within the state is not conducive to an application of an adjustment since double counting and the lack of uniformity appear inherent in any non-specified adjustment attempt. Another flaw in the expert's theory is that out-migrating patients would be recaptured by the development of additional programs within the district. This is not a justified assumption in that the out-migration occurs even though there is currently an underutilized capability within the district and it becomes obvious that many out-migrators go elsewhere for reasons totally unrelated to the availability of quality care within the district. Further, there is a substantial question as to the reliability of the data relied upon by St. Anthony's expert in her calculation of an assumed out-migration percentage. The expert relied upon Med Par data which reports on Medicare patients constituting 55 to 60 percent of the District V population. The expert's assumption that the same percentage of non-Medicare patients would out-migrate as Medicare patients do, is erroneous because experience has established that Medicare referral patterns do not necessarily match those appropriate to the rest of the population. Another factor to consider is that a substantial number of the people who make up the District V population are seasonal residents and many of these individuals return for major surgery, especially of an elective or non-emergency nature, to those areas from which they have come and with which they are most familiar and comfortable. St. Anthony's expert, in addition to suggesting an alternative to actual use rate, also suggests that instead of using a 350 procedure figure in calculating numerical need, a 200 procedure figure be used because of the independent pediatric program at All Children's Hospital. The Department urges that this be rejected on the basis that it ignores certain salient factors. One of these is that for the purpose of applying rule standards, All Children's/Bayfront's shared service qualifies as a single existing open heart surgery program. Also, open heart procedures, by their nature highly specialized and complex, require costly, highly specialized manpower and facility resources and the application of the rule procedure standard is, even in the eyes of Petitioner's planner, designed to limit unnecessary duplication of resources while maintaining a high quality of care. Petitioner shows no legitimate health care planning purpose for using any figure other than that called for by the rule and applied by the Department, which is found to be reasonable and appropriate. Moreover, there is a limited pool of nurses available to staff the specialized functions of an open heart surgery program or a CCU incident thereto. The nursing staff which works in these units is made up of specially trained individuals critical to the success of the program and it is generally difficult to recruit this caliber of nurse. In the event an additional facility, Petitioner, is authorized to establish its own separate program, it will have a substantial adverse impact on the staff situation at the existing facilities, and if basic economic principles apply, could result in an increase in nursing costs and a related increase in health care charges. Another factor to be considered is the potential for loss of patients at Bayfront/All Children's if the St. Anthony's operation is begun. One witness estimates a 42 percent (110 adult procedure) loss to Bayfront/All Children's based on the reasonable assumption that several of the cardiologists on staff at St. Anthony's, who currently refer patients to the group performing open heart surgery at All Children's, would begin to refer their patients to the "in house" capability at St. Anthony's where the surgery, now being performed at All Children's, would henceforth be accomplished. It is reasonable to expect that a substantial, if not 42 percent, loss will occur, and taken together, the loss of referrals and the loss of staff to St. Anthony's by the opening of that program would have a substantial adverse impact on the open heart surgery program at All Children's/Bayfront. This potential diminishment in the efficiency and quality of care in the existing open heart surgery program at All Children's/Bayfront, which may come about as the result in the reduction in number of adult patients treated there is not justified in that there is no showing that any group in District V, including the medically indigent, are receiving less than adequate treatment. Even assuming there 1:3 no need established utilizing the Department's numerical methodology, an applicant can successfully apply for a certificate of need if it shows there are "not normal" circumstances justifying award of the certificate. It has long been the Department's position that these "not normal" circumstances be raised by the applicant in the application prior to the completeness deadline in order for them to be legitimately heard, considered, and resolved at hearing. Review of the application submitted by St. Anthony's in this case fails to reveal that the applicant alleged or demonstrated any "not normal" circumstances and even that which might be so considered, the out- migration theory previously discussed herein, was not raised in the application, but only in the testimony of St. Anthony's expert at the hearing. Petitioner has shown no problems regarding financial accessibility nor has it shown that any identifiable subgroup within the district is having difficulty obtaining open heart services. Indigent patients are being served effectively and it was demonstrated that, as currently constituted, All Children's and Bayfront both provide a higher percentage of indigent care than does applicant, St. Anthony's. Assuming approval of St. Anthony's application, there is no indication it will increase its percentage of indigent care in the open heart surgery area above that which it already provides in the other services offered. Rule 10-5.011(f)4(a), FACE requires access to open heart surgery services within two hours for at least 90 percent of the service area population. There is no evidence offered by Petitioner to indicate that this standard is not being met by the existing facilities. St. Anthony's has not established by competent evidence its ability to recruit and maintain adequate, experienced staff to implement its open heart program if approved though, in reality, this may well be one of the lesser problems involved and, as was stated previously, there was no showing that approval of its program would, by enhancing competition, lower costs for health care services. Quite the contrary, it appears that St. Anthony's program would constitute an unnecessary duplication of a specialized service and would have an adverse impact upon the All Children's/Bayfront program and, possibly, the others within the district. Petitioner's evidence of prospective charges for open heart surgery, showing it to anticipate lower charges than Largo and Plant, is somewhat irrelevant in that those two facilities are located in an area of the district which does not fall within the primary service area considered here. Petitioner contends that the Department's approval of a CON for open heart surgery by Humana-Brandon, in District VI, and its approval of a certificate for open heart surgery for Tallahassee Community Hospital, in District III, are inconsistent with its denial of its application in District V. For a variety of reasons, other than the fact that the districts are different and the conditions dissimilar, there is little inconsistency involved. Granting approval of a CON for open heart surgery to St. Anthony's creates a legitimate concern that approval would cause the currently existing All Children's/Bayfront program to drop well below the 200 annual procedures considered necessary for quality of care. Further, in the Tallahassee area, a "not normal" situation existed which does not exist here. The geographical separation of alternative facilities in the Tallahassee area is substantially different and creates an entirely different picture that which exists in the District V/District VI area. Taken together, then, it is found that application of the numerical need and ancillary provisions of rule 10-5.011, F.A.C. demonstrates no numerical need for a new program and approval and implementation of St. Anthony's application would likely result in a diminishment, as opposed to enhancement, of the quality of open heart surgery care in the District as well as an increase rather than a decrease in health care costs. Further, it is found that there are no "not normal" circumstances, aliunde the numerical need, to justify approval of Petitioner's application.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the application of St. Anthony's Hospital for approval of a certificate of need to establish and operate an open heart surgery program at its facility in St. Petersburg, Florida be denied. RECOMMENDED this 22nd day of February, 1989 at Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-0637 The following constitutes my specific rulings pursuant to Section 120.57(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. By St. Anthony's Hospital: Accepted and incorporated herein Rejected as contra to the weight of the evidence. Accepted in so far as open heart surgery is not done at Bayfront. Accepted and incorporated herein Accepted and incorporated herein Accepted - 13. Accepted and incorporated herein 14. - 22. Accepted and incorporated herein 23. - 26. Accepted and incorporated herein Rejected as not proven Rejected Rejected & 31. Accepted and incorporated herein Rejected & 34. Accepted and incorporated herein Last sentence rejected. Balance accepted. & 37. Accepted Accepted and incorporated herein Rejected. There was no showing any patient from St. Anthony's has been harmed by transfer to All Children's nor that patients or their families are dissatisfied. - 42. Rejected as not supported by evidence of record. 43. - 47. Accepted and incorporated herein 48. & 49. Accepted 50. & 51. Accepted as to total procedures in District V but rejected as to the conclusion that-all existing providers are performing at a level of more than 350 adult open heart surgeries per year. While Largo and Plant may, All Children's/Bayfront is not. 52. & 53. Accepted Rejected as not supported by the evidence Accepted as a cite to the pertinent rule - 59. Rejected. Out-migration is not a proper factor for consideration under statute or rule Accepted as to the rule not addressing mixed programs. - 63. Rejected as not consistent with the rule and proper implementation of the need methodology thereunder. The conclusion that all existing programs in District 10 are currently operating at more than 350 procedures annually is rejected. All Children's is not. Accepted Accepted and incorporated herein & 68. Rejected. Use of figures attributable to out- migration is not provided for or permitted by the rule. Accepted and incorporated herein Accepted Irrelevant. Even if true, there is no showing of the reason or that petitioner would capture these patients. Accepted Accepted Accepted & 76. Rejected. Cited provision of application stated "may" indicate, not "did' indicate. In addition, MEDPAR data relates only to Medicare patients and an extrapolation of that figure is not necessarily reliable. Accepted Accepted but not considered controlling in that the rule provides time reference for use in the methodology. Not established & 81. Accepted 82. Rejected as not supported by any independent evidence of record. Accepted - 87. Accepted 88. & 89. Rejected. Bayfront's application was withdrawn. 90. Accepted By the Department of Health and Rehabilitative Services 1.-18. Accepted and incorporated herein 19. & 20. Accepted and incorporated herein Accepted and incorporated herein & 23. Accepted and incorporated herein 24. - 26. Accepted and incorporated herein 27. - 29. Accepted and incorporated herein 30. - 32. Accepted and incorporated herein 33. & 34. Accepted and incorporated herein 35. Accepted and incorporated herein 36. & 37. Accepted 38. - 40. Accepted and incorporated herein 41. No ruling. Not understood. 42. Accepted and incorporated herein 43. Accepted and incorporated herein 44. Accepted and incorporated herein 45. - 47. Accepted and incorporated herein 48. Accepted 49. - 55. Accepted and incorporated herein 56. Accepted 57. Accepted and incorporated herein 58. & 59. Accepted and incorporated herein 60. & 61. Accepted and incorporated herein 62. Accepted and incorporated herein 63. & 64. Accepted 65. Accepted and incorporated herein 66. Accepted 67. Accepted and incorporated herein 68. Accepted 69. Accepted By All Children's Hospital 1. - 3. Accepted and incorporated herein 4. & 5. Accepted 6. & 7. Rejected as a summary of testimony and not a Finding of Fact 8. & 9. Accepted 10. - 19. Accepted and incorporated herein 20. - 22. Accepted and incorporated herein 23. & 24. Accepted and incorporated herein Accepted & 27. Accepted and incorporated herein 28. - 30. Accepted and incorporated herein 31. & 32. Accepted Accepted Accepted and incorporated herein & 36. Accepted and incorporated herein By Bayfront Medical Center 1. - 3. Not Findings of Fact 4. - 8. Accepted and incorporated herein 9. & 10. Accepted and incorporated herein 11. & 12. Not Findings of Fact 13. - 49. Accepted and incorporated herein 50. & 51. Accepted and incorporated herein 52. & 53. Accepted and incorporated herein 64. - 56. Accepted and incorporated herein 57. - 68. Accepted and incorporated herein Accepted and incorporated herein - 72(c). Accepted and incorporated herein 72(d). Argument, not Finding of Fact 72(e).- 72(1). Accepted and incorporated herein Not a Finding of Fact Accepted and incorporated herein Accepted & 77. Accepted Not a Finding of Fact - 81. Accepted and incorporated herein Accepted and incorporated herein - 86. Accepted and incorporated herein 87. & 88. Accepted and incorporated herein Merely a comment on the evidence Accepted and incorporated herein Accepted and incorporated herein Accepted and incorporated herein Accepted & 95. Accepted Accepted Accepted and incorporated herein & 99. Accepted 100. Accepted. COPIES FURNISHED: Ivan Wood, Esquire Wood, Lusksinger & Epstein Four Houston Center 1221 Lamar, Suite 1400 Houston, Texas 77010 John H. Parker, Jr., Esquire Hudson, Rainer & Dobbs 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Steven M. Presnell, Esquire Lee Elzie, Esquire MacFarlane, Ferguson, Allison and Kelly 804 First Florida Bank Building Tallahassee, Florida 32301 Gerald B. Sternstein, Esquire H. Darrell White, Jr., Esquire McFarlain, Sternstein, Wiley and Cassedy, P.A. 600 First Florida Bank Building Tallahassee, Florida 32301 Michael J. Cherniga, Esquire Roberts, Baggett, LaFace & Richard 101 East College Avenue Tallahassee, Florida 32301 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 R. S. Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
Findings Of Fact Petitioner, Bayonet Point Regional Medical Center, (Bayonet Point), has applied for a certificate of need in part for a cardiac catheterization laboratory and for open heart surgery. Bayonet Point is an existing hospital located in Hudson in the northwest corner of Pasco County, part of District V of Respondent, Department of Health and Rehabilitative Services (HRS). District V also includes Pinellas County. Hillsborough County, part of HRS District VI, is adjacent to District V. Hillsborough County is southeast of Pasco County and east of Pinellas County. Bayonet Point has five board certified cardiologists on its staff. It also has the nursing and other support staff needed by those cardiologists. If a cardiac catheterization laboratory and open heart surgery is added at Bayonet Point, Bayonet Point will be able to attract the additional needed specialists and staff. Under the rule methodology for determination of need for cardiac catheterization laboratories set out in Rule 10- 5.11(15)(1) through (o), Florida Administrative Code, there is no need for an additional cardiac catheterization laboratory in District V. However, the rule methodology referred to in the immediately preceding paragraph incorporates 1981 cardiac catheterization use rates. The 1981 use rates are out of date and lower than actual use rates. Using actual 1985 use rates, the rule methodology would demonstrate a need for one additional cardiac catheterization laboratory in District V. In addition, even the actual 1985 cardiac catheterization use rates do not include or account for substantial utilization of Hillsborough County cardiac catheterization laboratories by residents of Pasco County. There is a need for at least one additional cardiac catheterization laboratory in District V by the year 1986. The two existing cardiac catheterization laboratories in District V are both in Pinellas County. Within District V, there is a need for a cardiac catheterization laboratory in Pasco County. New Port Richey is centrally located both in terms of geography and in terms of population within Pasco County. Hudson, being in the northwest corner of Pasco County, is not. Hudson does have better access to the eastern and northeastern portions of Pasco County because of better arterial road access. Hudson also is more accessible to southern portions of Hernando County, part of HRS District III, which also are within Bayonet Point's primary service area. Hernando County also is without a cardiac catheterization laboratory and the southern portion of Hernando County needs one too. There is no need for additional open heart surgery services in District V under the rule methodology for determination of such need set forth in Rule 10-5.11(16), Florida Administrative Code. The rule methodology employs 1981 utilization rates which project an average of approximately 342 open heart surgery procedures per year in the three existing open heart surgery programs in District V in the year 1986. Using 1985 utilization rates, the average utilization drops to approximately 317 procedures per year. None of the three existing open heart surgery programs in District V are projected to do 350 or more open heart surgery procedures in 1986. The rule methodology requires that all existing open heart surgery programs must be projected to do 350 or more procedures per year in 1986 before an additional open heart surgery program can be approved. There is no open heart surgery service available at Bayonet Point at this time, and there is currently no open heart surgery service within 30 minutes travel time from Bayonet Point by emergency vehicle under average travel conditions. Approximately 1200 Pasco County residents per year are being sent out of District V for cardiac catheterization, mostly to Tampa General Hospital. It can be estimated that 300 of those patients also undergo open heart surgery.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent, Department of Health and Rehabilitative Services, enter a final order granting the portions of the application of Petitioner, Bayonet Point Regional Medical Center, CON Action No. 3083, for a certificate of need for a cardiac catheterization laboratory and open heart surgery. RECOMMENDED this 30th day of May, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1986.
